Trading the Trend with Strong Weak Analysis

I don’t ever take trades based on convergence. But I think its an interesting observation that the current relationship between AUD and NZD seems to be an outlier.

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Let’s think about the fundamentals, which drives every currency, to be strong or weak, observe anything there?

2022-11-20_17-58-48

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Yes indeed, there are valid reasons for the divergence between the performances recently of the AUD and NZD. These have occurred before. The current divergence is significant in magnitude. But these underlying factors have not yet been seen to be permanent distinctions.

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Can you give us an example of “significant divergence”? You must be looking at this on the charts right?

Sure. I use a method different to Dennis’s which notes the position of price on each of the 28 leading forex charts compared to the 50EMA. I was using it before I found this thread, and note it gives similar results most of the time.

If price is above the 50EMA this is bullish for the base currency but bearish for the counter currency. Across the 28 pairs this gives a possible “most bullish” score of 7-0 and a possible “most bearish” score of 0-7. My 7-0 and 0-7 score currencies usually tally closely with Dennis’s Strong/Weak currencies.

Some currencies spend most of their time with closely matched bullish/bearish scores. For example EUR and CHF, AUD and NZD, AUD and CAD, and to lesser extent EUR and GBP. When the two currencies in these groupings start to score 7-0 or 6-1 to 0-7 and 1-6, that is unusual and worth noting, nothing more.

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Decline in USD looks like it might be over

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USD takes a step back

Note; I will be traveling tomorrow and will not post again until Thursday evening

Everyone have a wonderful Thanksgiving

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And to you, Dennis!

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GBP was the winner for the week but a slow week, I would expect things to pick up this week and maybe we get a Santa rally this year,

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GBP was the winner for the week but a slow week, I would expect things to pick up this week and maybe we get a Santa rally this year,

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Thanksgiving usually dampens down Forex trading. Hope you and all our American members had a good holiday.

(It’s just another week for us Brits)

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I guess I was right about things picking up, I just did not expect so much red

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Big reversal day for top trade NZDUSD, long term trend is down for this one so it could head south rather quickly here. Still it gave us over 100 pips

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CAD continues to drop

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Declining oil prices are hurting the Canadian dollar

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Stocks surge and risk on currencies do the same

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US dollar takes another big hit, a very red day

If you are still holding top trade NZDUSD you are up over 250 pips from its entry signal

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No love for the US dollar this week, Top Trade NZDUSD just keeps going

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