Analyzing 8 Currencies: A Weekly Forex Breakdown & Insight

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In my trading strategy, I analyze eight custom currency indexes on the 30-minute time frame to capture short-term market movements. I utilize pivot points, Exponential Moving Averages (EMAs), and various technical analysis techniques to develop a bullish or bearish bias for each currency. By examining the interactions between these indicators and price action, I can better understand the direction of the market and identify high-probability trading opportunities that align with the prevailing market sentiment. By focusing on the strength and weakness of major currencies and aligning our trades with the overall market mood, we aim to make informed decisions in the dynamic world of forex.

Here's how I use these charts!

Custom Currency Indexes: I've created custom indexes for eight major currencies: USD, EUR, GBP, JPY, CHF, AUD, NZD, and CAD. These indexes help me monitor the strength and weakness of each currency relative to the others, giving me valuable insights for my forex trades.

Market Sentiment: I also pay attention to the overall market sentiment, which is generally considered "risk-on" when AUD, NZD, and CAD are showing strength, and USD, CHF, and JPY are showing weakness. This risk-on mood indicates that traders are more willing to take on risk, favoring higher-yielding currencies like the AUD, NZD, and CAD.

Analyzing Currency Pairs: When looking for trading opportunities, I analyze both the relevant currency indexes and the market sentiment. For example, if I'm considering a trade on the AUD/USD pair, I would look at the AUD index and the USD index to gauge the strength and weakness of the currencies.

Matching Up with Market Sentiment: If the strength and weakness of the currencies in the pair align with the overall market sentiment (e.g., AUD is strong and USD is weak in a risk-on environment), it may be a good time to take the trade. If the currency strength and weakness do not match up with the market sentiment, it might be better to stay out of the trade.

In summary, my forex trading strategy combines custom currency indexes, market sentiment, and analysis of individual currency pairs. By considering these factors together, I aim to identify favorable trading opportunities in line with the prevailing market conditions.
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My current bias for each currency on the 30 minute chart. May 7, 2023

USD: The USD is clearly experiencing a downward trend. Recently, there has been a significant refusal to breach a resistance zone, causing it to fall below all of my EMAs. I believe the downward momentum is likely to persist.

GBP: Recently, the pound has gained considerable upward momentum and appears to be preparing for a sustained movement in the same direction.

EUR: The EUR has lately broken through long-term trends and support levels, indicating a potential continued decline. While I maintain a bearish outlook, I am closely monitoring price movements. I have observed an RSI divergence on the 30-minute chart, which I consider a warning to be wary of additional declines until a substantial pullback occurs.

JPY: Recently, the JPY has broken a short-term trend and a head & shoulders pattern. The price is now below all of my EMAs and is moving in accordance with the longer-term downward trend.

CHF: The CHF has recently broken a long-term trend and support level. Currently, the price is retesting the previous support as potential resistance. Based on this price behavior, I anticipate further declines.

AUD: While the AUD is experiencing an upward trend, it is encountering notable resistance levels that could exert downward pressure. Nevertheless, I will maintain my bullish stance until evidence suggests otherwise.

NZD: The NZD has recently displayed strong bullish momentum, and my inclination is towards an upward direction. However, exercise caution as the price action has formed a bullish continuation pattern, but there are indications of decelerating momentum, suggesting a possible pullback in the near future.

CAD: The CAD has experienced a substantial upward surge lately. Although I am currently bullish, the price appears somewhat extended and is approaching a recent high, which could lead to some selling pressure.

註釋

We saw the drop in the USD we were expecting. After bouncing back a bit, we're now in an important spot. Keep watching it closely.