`Welcome to my "Ranking, Rating and Score" article for the coming week. The article "Strength and Comparison" has also been published. In the Top 10 of the Monthly Ranking and Rating list for the coming month the following stronger currencies are well represented for going long: USD (3X) with the NZD (3X). The weaker currencies are the GBP (6X) followed by the CAD (2X) with the EUR (2X).
A nice combination for coming month may be e.g:
- GBP/USD with the EUR/NZD
- GBP/NZD with the EUR/USD
- USD/CAD with the GBP/NZD
- USD/CAD with the EUR/NZD
- NZD/CAD with the EUR/USD
- NZD/CAD with the GBP/USD
Some of the pairs in the Top 10 comply for a longer term trade based on the Technical Analysis (TA) of the Weekly and Monthly chart. For the coming month these seem to be:
GBP/NZD, GBP/USD, GBP/CHF, NZD/CAD, GBP/AUD, GBP/JPY and EUR/USD.
For more details read both of my articles where the relevant Charts and Tables are provided.
For the GBP pairs the GBP/NZD is the most interesting not being yet in the overbought/oversold followed by the GBP/CHF which is a little bit in that area but may stay within when the new month starts. The GBP/USD is in extreme overbough/oversold area according to the monthly chart using the Bollinger Band® (20). Strong overboughT/oversold areas in the Monthly chart may still offer a good opportunity but the pull back may be strong!
These are just a few examples and many other combinations are possible. The mentioned pair combinations can be traded at the same time according to the rules of the FxTaTrader strategy because these are all different currencies. Generally speaking, by not trading the same currency in the same direction more than once in the same Time Frame you may have better chances with lower risk. In any case it always seems better to spread risk and this can be done in many different ways.
When trading with more than 2 micro lots it is a good idea to have a diversification and depending on your preferences it may offer opportunities by going long or short on a specific currency trading it against other currencies.
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Ranking and Rating list
Analysis based on TA charts for all the major currency pairs. Good luck to all. No advice, just info. Every month the Forex ranking rating list will be prepared around the change of the month. All the relevant time frames will be analyzed and the ATR and Pip value will be set.
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For analyzing the best pairs to trade looking from a longer term perspective the last 12 months Currency Classification can be used in support.
This was updated on 30 September 2016 and is provided here for reference purposes:
Strong: USD, JPY, NZD. The preferred range is from 6 to 8.
Neutral: AUD, CHF. The preferred range is from 4 to 5.
Weak: EUR, GBP, CAD. The preferred range is from 1 to 3.
When comparing the 12 months 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 traded in the Daily chart or in a lower Time Frame. Nevertheless they may offer good chances for the short term trader.
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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 3 Time Frames: the Monthly, Weekly and Daily. The result of the technical analysis is the screenshot here below.
When comparing the 12 months 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. 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 JPY. Unless a clear opportunity based on the longer term is shown it seems best to be avoided.
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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 educational purposes only and is aimed solely for the use by ‘experienced’ traders in the FOREX market as the contents are intended to be understood by professional users who are fully aware of the inherent risks in forex trading. The content is for 'Forex Trading Journal' purpose only. Nothing should be construed as recommendation to purchase any financial instruments. The choice and risk is always yours. Thank you.