As retail forex traders we often get into trades on setups alone.
But what if you’re buying the weakest currency and selling the strongest?
That’s a clear recipe for failure.
Using a currency strength meter, we can see what’s really moving and which currency has momentum or lack of behind it.
This week’s analysis will reveal the strongest and weakest currencies to stay on the right side of the trend.
What is a Currency Strength Meter?
A currency strength meter is a tool that measures the relative strength of individual currencies by analysing the trend movements across multiple currency pairs.
Why do they work:
- Visual Clarity: Instantly see what’s strong or weak without scanning dozens of charts.
- Smart Filtering: Avoid trades with two equally strong or weak currencies. 7
- Fundamental alignment: It can often reflect underlying macro trends after they start.
It can help you make more informed decisions.
This Week’s Currency Strength Overview
The strongest currencies include the EUR +6, CHF +6, and GBP +5.
The weakest currencies include the JPY -3, CAD -4, and USD -5.
Pairing the strongest currencies against the weaker ones we could be looking for setups on EURJPY, EURCAD, EURUSD, CHFJPY, CADCHF, USDCHF, GBPJPY, GBPCAD and GBPUSD.
Key Chart to Watch
USDCHF puts the weakest currency against the strongest, which tells me this chart is in a downward trend. Confirmed by the price action on the chart.
Now the price has traded through the key support level of 0.8100, we can look for opportunities on the sell side if the price forms a new lower high.
The trend line resistance could also be a point where traders look to trade short.
Final Thoughts
A currency strength meter helps to identify flows as early as possible. If we can combine this type of analysis with fundamental and technical, then we are adding further confluence to our trades.
