Forex Metrics And Chart Week 41 / 2017
Forex Technical Analyst Trader | Oct 09, 2017 12:22AM ET
The Top 10 of the Ranking and Rating list for the coming week shows the following stronger currencies being well represented for going long: the EUR(3X) with the USD(3X) and the CAD(3X). The weaker currencies are the NZD(4X) followed by the AUD(3X) and the GBP(2X).
By diversifying a nice combination can be traded in the coming week like e.g.:
- EUR/NZD with the GBP/USD
- NZD/USD with the EUR/AUD
Ranking and Rating list
Analysis based on TA charts for all the major currency pairs. Good luck to all. No advice, just info. Every week the Forex ranking rating list will be prepared for the weekend. All the relevant Time Frames will be analyzed and the ATR and Pip value will be set.
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 17 September 2017 and is provided here for reference purposes:
Strong: EUR, AUD and CAD. The preferred range is from 6 to 8.
Neutral: NZD and CHF. The preferred range is 4 to 5.
Weak: USD, JPY and GBP. The preferred range is from 1 to 3.
When comparing the 13 weeks Currency Classification with the pairs mentioned in the Ranking List above some would then become less interesting. On the other hand, these pairs are at the top of the list partly also because of their volatility. It seems best to take positions for a short period then and take advantage of the high price movements.
With the FxTaTrader Strategy, these pairs are not traded because these would be trades in the 4 Hour chart or in a lower Time Frame. Nevertheless, they may offer good chances for the short term trader.
Currency Score Chart
The Currency Score analysis is one of the parameters used for the Ranking and Rating list which is published also in this article. The Currency Score is my analysis on the 8 major currencies based on the technical analysis charts using the MACD and Ichimoku indicator on 4 Time Frames: the monthly, weekly, daily and 4 hours. The result of the technical analysis is the screenshot here below.
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When comparing the 13 weeks Currency Classification with the recent Currency Score, as provided in the image above, we can determine the deviations. In the article "Forex Strength and Comparison" this is analyzed in more detail.
Chart of the Week
The Chart for this week is the NZD/USD 8 Hour chart.
Price is clearly in a downtrend and made a low lately at 0,7059. It is now consolidating above that level and it may continue to consolidate in the coming period and also have a pullback towards the Tenkan-Sen and possibly the Kijun-Sen.
- A nice sell opportunity would be after a pullback around the level of the Kijun-Sen at 0.7151 and the yellow dotted line. This seems to be a resistance where price found support before breaking through. The PSAR will turn positive when price reaches that level and by preference the PSAR should turn negative again. Also, by preference the candlesticks should show a good pattern that confirms the entry. This could be e.g. one of the reversal Candlesticks patterns. Check e.g. the following link for more information: Bulkowski's Top 10 Reversal Candlesticks
- The target should be above the latest recent low at 0,7059.
- After the pullback, towards the Kijun-Sen or the yellow dotted line, the MACD should show weakness in the MACD minus Signal, these are the Blue and Red bars. Either the red bars should become larger or the blue bars shorter. The MACD should stay below the zero line.
In case of a stronger pullback with price going far above the Kijun-Sen and the MACD not recovering the set-up is no more valid.
A stop-loss should be above the Kijun-Sen and the yellow dotted line keeping in mind some space for the price to pick up the downtrend again in case of the anticipated pullback.
- This is a pair that fits best in Point 3 of the Comparison Table Guide. For more information read my other Weekly article called the "Forex Strength and Comparison".
- The NZD is a Neutral currency and the USD is a Weak currency. The Currency Score Difference is -6.
The set-up mentioned remains valid as long as the pair remains in the Top 10 of the coming Weekly Ranking and Rating lists and continues to comply with the point of the Comparison Table Guide mentioned above.
Besides this article, I also use the Forex "Strength and Comparison" which is also available once a week on my blog. In that article, we look in more detail at the relative position of the currencies and pairs. We will look in more detail at the interesting pairs from a longer term perspective for trading in the Daily and Weekly chart. We will use the information from this article, "Ranking, Rating and Score", and analyze it further in more detail.
It is recommended to read the page "Currency score explained", "Introduction to the FxTaTrader Forex Models" and "Statistics and Probabilities" for a better understanding of the article. If you would like to use this article, then mention the source by providing the URL FxTaTrader.com or the direct link to this article. Good luck in the coming week.
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