Monthly Currency Score For October

 | Oct 06, 2015 06:47AM ET

The Currency Score analysis is one of the parameters used for the Ranking and Rating list which was published earlier. It is recommended to read the page Models in practice for a better understanding of the article. This article will provide my analysis on the 8 major currencies based on the technical analysis charts using the MACD and Ichimoku indicator on 3 time frames, the monthly, weekly and daily. The result of the technical analysis are the 2 screenshots in this article showing the Currency Score and the Currency Score Difference.

Last 12 months currency classification

The last 12 months currency classification from a longer term perspective are provided for reference purposes. There are some changes and the new classification is provided here with the necessary charts which can be found at the bottom of this article. The currencies are classified for the coming months as follows:

  • Strong: CHF / GBP / USD. The preferred range is from 6 to 8.
  • Average: EUR / JPY. The preferred range is from 4 to 5.
  • Weak: AUD / CAD / NZD. The preferred range is from 1 to 3.


Currency Score for October 2015

For analyzing the best pairs to trade this classification is the first issue. When looking at the most recent score that is used for the coming period we can see in the screenshot below the following deviations:

  • The GBP has a score of 4. This is a strong currency and it should have by preference a score from 6 to 8. It has a score at the moment of an average currency.
  • The JPY has a score of 7. This is an average currency and it should have by preference a score from 4 to 5. It has a score at the moment of a strong currency.

The conclusion is:

  • Most of the currencies are at the right level when looking at the last 12 months currency classification except for the GBP and the JPY.
  • There is most probably a pullback for the GBP when looking at the market as a whole. The uptrend has lost momentum.
  • There is an increase of momentum for the JPY which is getting stronger.
  • The pairs that we may look at are all most probably trending except for the pairs with the JPY which are most probably ranging. Some pairs may be in a trend and having momentum. These can be interesting, check the Ranking and Rating list published this weekend for more information.
  • The GBP may offer a good opportunity to step in. However, it is important to determine if the specific pair is indeed having a pullback. For that reason it is good to see the momentum returning in that pair.