Forex Strength And Comparison For Week 6 / 2017

In the Currency Strength table the AUD was the strongest currency while the GBP was the weakest. The AUD gained 4 points last week and the JPY gained 3. The USD, GBP and CHF lost 2 points. All the other Currencies remained around the level of the previous week with a maximum difference of just 1 point.

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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. 
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 January 8, and is provided here for reference purposes: 
Strong: USD, NZD. The preferred range is from 7 to 8.
Neutral: CHF, AUD, CAD. The preferred range is from 4 to 6.
Weak: JPY, EUR, GBP. The preferred range is from 1 to 3.

When looking at the Average 13 wks. score, the USD remains the strongest of all while the EUR remains the weakest. The currencies are grouped together around a level which makes clear to what classification they fit best. For some currencies this may not be very clear, a good example at the moment is the CAD - a Neutral currency but having an Average 13 wks. score of 5,7692 being between the Strong and Neutral currencies.

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The Weak Currencies

The JPY is gaining strength lately and seems to be bottoming. The EUR and GBP are clearly remaining very weak. Below is 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. For more information about the currency Score of this week you can read the article "Forex Ranking, Rating and Score".
By using the comparison table directly below you can get a view without the volatility and statistics as opposed to the "Ranking and Rating list".

 

"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. 

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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:
AUD, NZD 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:
GBP, EUR and CHF. 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. Good examples are:
AUD, JPY and USD.

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: EUR/AUD, EUR/NZD, EUR/CAD, AUD/CHF, AUD/USD, NZD/CHF and AUD/JPY.