Currency Strength Meter: 18th October
The currency strength meter this week highlights the stronger currencies were AUD, GBP and CHF. The weakest currencies are USD, JPY. The EURO has rose slightly on the strength meter however it is still weak against the stronger currencies. The JPY is now at the lowest it can go on the meter which often sees a currencies weakness reverse. This can offer us many trading opportunities this week if these markets begin to form trends.
The USDJPY could be one to watch this week as the JPY is in a reversal zone. This could strengthen in the short term against a weakening currency like the USD.
Trending Pairs of the week:
AUDUSD, EURAUD, AUDJPY, GBPUSD, GBPJPY, EURGBP, USDCHF, CHFJPY, EURCHF.
Chart To Watch: USDJPY
The currency strength meter shows the JPY as the weakest currency which is could continue into this week. However, when a currency reaches -7 on the currency strength meter the currency weakness can reverse and strengthen. When this happens we want to identify a currency that is getting weaker which could lead to a reversal in the trend of the market in the short term.
The price of USDJPY is currently at a major swing level around 114.50. If the price is going to reverse we need to see some bearish price action here. Either a daily bearish close or a change in trend on the lower time frame.
Looking at the lower time frame we can see the 4hr trend is clearly showing an uptrend, this needs to change before we consider looking for a short term reversal position. If the price can break the 4hr trend by closing below lows we could look for the market to move back to major support of 112.25.