Forex Strength And Comparison For Week 51 / 2016

In the Currency Strength table the USD was the strongest currency while the JPY was the weakest. All the currencies are more or less at the same level as last week except for the CHF which gained 3 points and the NZD which lost 4 points. The CAD remains strong for the last 3 weeks with a score of 7.

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13 Weeks Currency Score Strength

The 13 Weeks Currency Strength and the 13 Weeks Average are provided here below. This data and the "13 weeks Currency Classification" are considered for deciding on the preferred range. 

  1. First of all the strength over a period of the last 13 weeks is considered. See each row for more information.
  2. Next the 13 weeks average is considered, see the last row called "Avg. 13 wks."
  3. The number of weeks that a currency was stronger than another currency can also be considered.
  4. The Technical Analysis (TA) Charts for each Time Frame could also be consulted.

 

For analyzing the best pairs to trade looking from a longer term perspective the last 13 weeks Currency Classification can be used in support.
This was updated on 18 December 2016 and is provided here for reference purposes: 
Strong: USD, NZD. The preferred range is from 7 to 8.
Neutral: JPY, CHF, AUD, CAD. The preferred range is from 3 to 6.
Weak: EUR, GBP. The preferred range is from 1 to 2.


When looking at the Average 13 wks. Score all the currencies are within their range. The USD is the strongest of all while the GPB is the weakest. The CAD has become a Neutral currency and as can be seen all the Neutral currencies are around an Average 13 wks. Score of  4 to 5. The CAD is the weakest and the AUD the strongest of the Neutral currencies.

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The Strong Currencies + CAD

The NZD lost a lot of strength in the last week while the CAD is now in the area of Strong currencies. The USD remains very strong.
Below you can see the Weekly Currency Score Chart with the 6 months data as a reference.

 

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Currency Score Comparison

"Comparison table" and the "Ranking and Rating list"

The Forex Currency Comparison Table compares each currency with its counterpart based on the Currency Score. 

 

"Comparison table" and the "Currency Score Chart"

The additional value of this table compared to the Currency Score table is that the Comparison Table compares the strength between the currencies of each pair. By subtracting the strength of the weaker currency from the stronger currency we have a way to compare each pair combination. 
The comparison table provides a way to compare currencies from a longer term perspective of 13 weeks and also simultaneously taking the current trend into account. By coloring the currencies in the X and Y axis according to their Classification we can show what the best combinations are. In doing this we apply 2 rules to make it clearer.

  1. First of all only better classified currencies in combination with weaker classified currencies are "Approved" when there is a Currency Score difference of at least 1 in the current week.
  2. The only exception is when 2 currencies are similarly classified but the Currency Score difference is equal to or more than 4.
  3. It means that each currency should be as far apart from each other as possible in the range from 1 to 8. The classification of the currencies in question may change in the longer term. By using the difference of 4 which is exact at the half of the range it seems a safe approach for trading 2 currencies which are similarly classified.
  4. Even though currencies may be in the same classification a currency may be in a weaker/stronger period and may even change its classification in the future. See the current classification for the coming period at the beginning of this article.

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Putting the pieces together

Based on the last "13 Weeks currency classification" and the "Currency Comparison Table" the most interesting currencies for going long seem to be the:
USD and CAD

These are Strong or Neutral currencies from a longer term perspective when looking at the last "13 Weeks currency classification".

For going short the same analysis can be done and the following currencies seem to fit best:
EUR and JPY
These are Weak or Neutral currencies from a longer term perspective.

Currencies with a high deviation seem less interesting to trade because they are less predictable. A good example at the moment is e.g. the:
GBP, NZD and JPY. 

Some of the pairs in the "Currency Comparison Table" comply for a longer term trade based on the Technical Analysis (TA) of the Daily and Weekly chart. For the coming week these seem to be: USD/JPY, EUR/USD, CAD/JPY, EUR/CAD, AUD/USD, CHF/JPY, GBP/USD, EUR/CHF, AUD/CAD, NZD/JPY, GBP/CAD and USD/CHF.

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Disclaimer: The articles are my personal opinion, not recommendations, FX trading is risky and not suitable for everyone.The content is for ...

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