News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bearish
Oil - US Crude
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Mixed
Gold
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Bearish
USD/JPY
Bullish
More View more
Real Time News
  • Ambiguity abounds. The US open finds the $SPX loitering above its 100-day moving average as well as its technical 'correction' (-10% from highs) and below the neckline of its H&S break https://t.co/MlsRVbzkBi
  • Commodities Update: As of 14:00, these are your best and worst performers based on the London trading schedule: Gold: -0.70% Oil - US Crude: -1.32% Silver: -1.67% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/4xYTddorjQ
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.28%, while traders in EUR/GBP are at opposite extremes with 64.12%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/7OJ5FXh4rF
  • another nasty week in Cable $GBPUSD but most of that sell-off was Monday and Tuesday, after which support came into play. 2712 has now helped to hold the lows for three (going on four) days - even as $USD rally has continued https://t.co/kKURzmx61S https://t.co/eHZZ9rZC9X
  • Commodities Update: As of 13:00, these are your best and worst performers based on the London trading schedule: Gold: -0.32% Silver: -0.93% Oil - US Crude: -1.02% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/fdLE2SYbFA
  • While risks may be starting to skew to the upside in Brexit negotiations, GBP/USD continues to trade in choppy fashion, with pullbacks finding support at 1.2720-30. Get your $GBPUSD market update from @JMcQueenFX here:https://t.co/TOrUJKapR1 https://t.co/txDbUikOFZ
  • Indices Update: As of 13:00, these are your best and worst performers based on the London trading schedule: FTSE 100: -0.21% US 500: -0.30% Wall Street: -0.50% France 40: -1.37% Germany 30: -1.72% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/eOrhf8Ozhy
  • Heads Up:🇺🇸 Fed Williams Speech due at 13:00 GMT (15min) https://www.dailyfx.com/economic-calendar#2020-09-25
  • 🇺🇸 Durable Goods Orders Ex Transp MoM (AUG) Actual: 0.4% Expected: 1.2% Previous: 2.4% https://www.dailyfx.com/economic-calendar#2020-09-25
  • 🇺🇸 Durable Goods Orders MoM (AUG) Actual: 0.4% Expected: 1.5% Previous: 11.2% https://www.dailyfx.com/economic-calendar#2020-09-25
Australian Dollar Remains Relatively Weak

Australian Dollar Remains Relatively Weak

2013-06-28 11:38:00
Jeremy Wagner, CEWA-M, Head of Education
Share:

Article Summary: Using this simple Forex technical analysis technique, determine the relative strength and weakness of a currency rather than a currency pair. This is an easy way for Forex beginners to identify stronger versus weaker currencies to trade. By using this simple analysis tip, we find the Australian Dollar remains the weakest currency against its other main counterparts.

Gauging relative strength of currencies is a common method employed by traders of all skill levels. The analysis is fairly simple and straight forward as previously laid out in “Know the Strong and the Weak Currencies.” The process can take about 15-20 minutes and doesn’t need to happen but once or twice per week.

Last week, we laid out 2 different approaches on how to trade a weak Australian Dollar. Performing the same analysis this week we find the Aussie still holds the spot for the weakest currency when compared in a broad sense against its currency competitors.

Forex Strategy: Matching Strong versus Weak

Currency

Up Arrows

Down Arrows

Change From Last Week

JPY

7

0

Higher 1 ranking

CHF

6

1

Lower 1 ranking

USD

5

2

Higher 2 rankings

EUR

4

3

Lower 1 ranking

GBP

3

4

Lower 1 ranking

CAD

2

5

Same ranking

NZD

1

6

Same ranking

AUD

0

7

Same ranking

When assessing the performance of the Aussie over the past 5 business days, it has retraced a portion of its weakness by countertrending towards short term strength. However, when standing back and reviewing the trends from a higher altitude, the Aussie is still below the 200 period Simple Moving Average against all of the other 7 main currencies. Therefore, we can conclude this is simply a counter trend retracement and longer term trends suggest Aussie weakness is likely to continue.

The trading opportunity is to sell weakness against strength. So we can sell those currencies at the bottom of the scale above while buying those towards the top of the scale.

Also, notice how the USDOLLAR moved 2 rankings higher. This could be a sleeper as well as it begins to cross above its 200 period Simple Moving Averages on the 4 hour charts. Therefore, we can keep an eye out for continued USDOLLAR strength. After all, if the equity markets continue to falter as they have begun to crack their respective support levels, the Greenback stands to be one of the biggest beneficiaries of a stock market sell-off.

There are many different ways to achieve the trade…either through trading a strong versus weak currency or by diversifying through a currency basket trade.

Regardless of your trading method, this simple analysis technique will help you identify a relative strong or relative weak currency to trade.

Good luck with your trading!

---Written by Jeremy Wagner, Head Trading Instructor, DailyFX Education

Follow me on Twitter at @JWagnerFXTrader.To be added to Jeremy’s e-mail distribution list, click HERE and enter in your email information.

See Jeremy’s recent articles at his DailyFX Forex Educators Bio Page.

Trading baskets can be handled several ways. The mirror platform offers a one click method to enter and exit the basket trade. Join our live Mirror Trader platform walkthrough each Wednesday at 3 pm ET and ask your questions in real time.

If you would like to learn more about trading with Moving Averages in Forex, register to view this free 15 minute video course on Simple Moving Averages.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES