Updated: Aug 1
Two Big Trade Opportunities
The Currency Strength Meter has helped forecast some major changes in currency demand and supply over the past weeks. In this post we are going to discuss the two trades you could have potentially caught using the Currency Strength Meter.
In the Currency Strength Meter scores above we can see how there has been a huge shift in economic strength in Japan and Canada. On one side the Japanese economy has shown strength appreciating from -35 to 0 over 3 days, while the Canadian economy has seen a hit decreasing from 11 to -11 in the same period.
Logikfx traders and professional members could have used this as a sign to look at CADJPY as a potential trading pair. Filtering out the noise of the market and focusing on a high odds entry.
As you can see in the CADJPY price chart above the currency pair has been down trending. If you had used the Currency Strength Meter scores to help find a short entry on the 6th you could have caught a huge drop in the exchange rate as shown above. This also fits into a breakout strategy if you follow such a method.
Moving on now to the next opportunity which was EURNZD.
As we can see in the 4HR chart above we have a EURNZD trend line setup in early march. This is seen on the third touch of the trend line in purple (01/03/2019). On that date however it was too early of a sign to know if this area is a valid resistance. After waiting a few days we have seen the price reject from that area and is now being used as a valid resistance level. This is confirmed by the various candle formations and candle types in this zone.
The next step we would do to make it a high odds entry is check the Currency Strength Meter fundamental quant scores to confirm our idea so that fundamentals are on our side. Anyone who isn't using this technology is already at a huge disadvantage in identifying these opportunities.
As we can see on the 04/03/2019 EUR showed a shift in weakness depreciating from 10 to 0. while NZD started to strengthen from -33 to -20.
The conclusion we could have made from this is as it reached a strong technical level, fundamentals also showed a shift on the 04/03/2019 which could signal us for an entry on the currency pair EURNZD for a short.
Although the scores have since been realigned to EUR being strong and NZD being weak, the signal on the 4th of March could have been your sign to catch a nice short opportunity.
Since then the currency pair has been shorting. However, it may be a good time to get out as it reaches a good area to actually buy.