FOREX: Strengths & Weaknesses


Yes, there’s plenty of action in FOREX Markets trading intraday, but, to gain a solid feel about the major trend in the currencies, we really need to examine just two items.

As most of the popular currency pairs are defined in comparison to the US DOLLAR, the real test of strength or weakness comes down to just two questions:

  • How is the US DOLLAR doing?” and,
  • How are all the other currencies doing relative to the US DOLLAR?”

Answer just these two questions, and you’ll know which way the winds-of-change are blowing in the economic world. You don’t need to read essays, stockpile advanced degrees or have inside ‘hot’ tips to do this. In fact, we can use an entirely visual approach that will yield solid, profit-oriented information.

Let’s do it, starting with the two questions again, but, this time using visual only answers without emotionally-loaded words, symbols, descriptions or opinions:

  • How is the US DOLLAR doing?”
  • Answer: (See chart below).


Now, for the second and last question:

  • “How are all the other currencies doing relative to the US DOLLAR?”
  • Answer:


There you have it. Your own eyes have provided enough proof to enable you to bypass all the ‘news’ that talks up the case for Europe or the state of the economies of any of the nations behind these currencies.

The US DOLLAR is STRONG. It’s the king-of-the-mountain for currencies at present. This isn’t a political statement, just a statement based on the truth of the chart. A Long position in the US DOLLAR is the winning trend at present. In like manner, the facts are (as you can plainly confirm from the above charts) that the EUR, JPY, CHF, AUS, CAD, GBP and NZD are WEAK Currencies.

All of them. Short positions in these are the winning side for profitability at present. As WD Gann used to write, ‘test all things’. I’d add, test them for yourself instead of trusting others opinions. – George