Intermarket analysis: Currency performance YTD and forecasting
In this chart I'm sharing my breakdown of the relative strength analysis of currencies, as suggested by Ashraf Laidi in his book 'Currency trading and intermarket analysis', a great read that was reccomended to me by David Alcindor. Thanks for that one David.
I'll quickly summarize my train of thought here:
I'll update this chart as we move forward and you'll see how useful and powerful this approach can be.
If interested in my trading signals, or in personal tuition, contact me privately. I'm offering a considerable discount on a packaged course which includes access to my private trading signals list for a year.
Cheers,
Ivan Labrie.
I'll quickly summarize my train of thought here:
- I see the cnh and gbp as interesting long prospects right now, based on the strong accumulation bases on chart.
- YTD performance wise, the Yen is the only positive one, and fundamentals favor it as a short candidate overall.
- EURUSD and CHFUSD are at the brink of turning into downtrend continuation plays, testing the weekly lowest high level. If sellers conquer this level, we can short these two against stronger currencies, ideally the most overextended to the downside to mean revert with. (Namely, CNH and GBP, right now. After a consolidation and new uptrend mode hgher, CAD, AUD and NZD.
- CAD, AUD and NZD might underperform the CNH and GBP right now, look for trades there until they are done consolidating. If both are trending up, better focus on other more dissimilar crosses (focusing on the weakest link, vs the strongest currencies).
- Long the dollar itself isn't favored, but, long USDCHF and short EURUSD, while long USDJPY might be a good idea soon. Don't trade if it's unclear, wait for a clean setup.
- GBP is currently above it's weekly mode, and basing for a move up, focus is on GBP longs primarily (fundamentals suggest either sideways or up until June at the very least, while fundamentals for CHF, EUR and JPY are quite bad. So, you know what to trade.
I'll update this chart as we move forward and you'll see how useful and powerful this approach can be.
If interested in my trading signals, or in personal tuition, contact me privately. I'm offering a considerable discount on a packaged course which includes access to my private trading signals list for a year.
Cheers,
Ivan Labrie.
Comment:
All currencies have suffered against gold, which means a serious shift is ongoing. We should be long gold, clearly, but talking forex, we can also evaluate which currencies are underperforming gold 'less'.
Right now, the Pound is back into support, CNH, AUD and CAD are performing worse.
One thing to note is that the free fall in CNH might have been overdone, and it's sitting right at a support level from 2014. I wouldn't touch it, because the PBOC might intervene.
We can pit CAD against EUR, GBP, CHF, JPY, AUD and NZD. Out of these, CHF is undeperforming EUR, and AUD is underperforming NZD drastically, so leave AUDCAD and CADCHF out of the picture and focus on NZDCAD and EURCAD longs, or CADJPY or GBPCAD trades.
We also know JPY is currently the most resilient currency, so, look for CADJPY, AUDJPY or USDJPY shorts.
Right now, the Pound is back into support, CNH, AUD and CAD are performing worse.
One thing to note is that the free fall in CNH might have been overdone, and it's sitting right at a support level from 2014. I wouldn't touch it, because the PBOC might intervene.
We can pit CAD against EUR, GBP, CHF, JPY, AUD and NZD. Out of these, CHF is undeperforming EUR, and AUD is underperforming NZD drastically, so leave AUDCAD and CADCHF out of the picture and focus on NZDCAD and EURCAD longs, or CADJPY or GBPCAD trades.
We also know JPY is currently the most resilient currency, so, look for CADJPY, AUDJPY or USDJPY shorts.
Comment:
GBP and JPY have remained stronger for now.
CNH also is moving back above the weekly mode, might be ripe for a buy soon.
CAD and AUD look strong, still trending up, but EUR and CHF and JPY don't so much. Even though they have retraced slightly, they sit below strong supply levels and are likely to turn down from here.