The International Monetary Fund said traders are probably using the dollar to fund “carry trades” around the world and the currency may still be overvalued even after its slide this year.

Below the daily chart with weekly blocks and hedge percentage.

The full article by Bloomberg(c) on:

http://bloomberg.com/apps/news?pid=20601068&sid=agLkrj4ZwFTw

Many traders using the early European Breakout and there are also many ways and strategies to trade it.

Some use a portion of last day/week range (volatility) to add or subtrack to/from the close of that day/week  (NY 4 PM) or to/from the early European open.

Below a simple solution for the weekly breakouts of the four major currency pairs.

Very important are the stops, risk levels and stops.

For more look at: http://www.2hedge.com/mmevbo.html 

Another view on the strength and weakness of the major currencies and cross rates,  which you can compare to earlier posts about this subject.

Good to see that the currecies, quoted in Yen, are all in the red zone, so below 1000, which means on average, more downward pressure than upward pressure.

Be aware following this strategy, to look at interest rate differentials, especially in Yen currency pairs.

Just try this easy tool and see what the global FX market is doing.

It shows also different performances tables in real money and pips.

http://www.finviz.com/forex.ashx

Just a quick look ranking strength and weakness on the major FX Rates and  major Cross Rates.

You can compare this with my earlier post on May 22th.

GBP/JPY now the strongest at 159.00 was on may 22th. 149.69

USD/CHF now the weakest at 1.0787 was on May 22th. 1.0866

The strategy is to hold the 2-3 strongest long and the 2-3 weakest short, depending on available margin in your trading account.

Below a number of Currency ETF’s (Exchange Traded Funds) quoted in US Dollar.

This 1e step in ranking means the strongest and weakest in this group and not a buy/sell signal, but interesting to see the developments during the last months as each colomn is 1 week.

Looking further in the ranking the ETF’s we see below that the Australian Dollar ETF trend is up for last 58 days and it’s 3-month ROC is the the highest of all.

The number 10 near the bottom we see the Yen ETF turned down (Quoted in US Dollar) with a negative 3-month ROC. 

This type of looking to Forex is different compared to Spot trading but many use Currency ETF’s for hedging their stock portfolios’and/or long term currency investors as well.

These two charts are the strength and weakness of the major currency pairs and cross rates.

It gives you the global picture about strength and weakness by comparing realtive strength of each of the currencies and cross rates.

The left chart is the situation per April 22th. and the right chart per May 8th.

On the left, the top (brown) on April 22th at USD/CHF 1.1643 per Mei 8th it moved all the way down to 24 at USD/CHF 1.1053

The USD/CAD in the middle per April 22th. 1.2403 and now down to 16 (black line) at USD/CAD 1.1495

It’s also clear what was happening last Friday as most major currencies to a new fresh direction with USD/AUD, NZD/USD, GBP/USD and EUR/JPY at the top (strongest) while USD/CHF and USD/CAD are the weakest

Our last artcle about FX Basket was March 30.

Today we look at the development of strength and weakness of the major currency pairs during the first three weeks of April as on the chart below and compare against the beginning of April.

The lines are the RSI’s of the major currencies and cross-rates and give you an idea how strength and weakness are looking for all of them in just one view.

For example: the purple line, NZD/USD came down all the way from > 80 to <40 or 20 pips only, while the brow line, USD/CHF from -30 to 66 or from 1.1270 to 1.1635

Due to travel outside the country the next update will be next Tuesday.

On our April 6th. article we wrote about ranking strong and weak currencies.

The strategy is to hold the strongest Long and the weakest Short according the ranking below and adjust the currencies each day when necessary.

You can compare how much they have changed since our earlier article on April 6th.

http://blogs.fxstreet.com/forexhedge/2009/04/06/ranking-forex-spot/

On April 6th the GBP/CHF strength was 1013 and the exchange rate 1,6733 ,  so to hold it long, while today the strength was on top at 1017 and exchange rate of 1.7252 so up 519 pips !

On April 6th the EUR/CAD weakness was  996 and the exchange rate 1.6622 , so to hold it short, while today the weakness was at the bottom at 977 and the exchange rate 1.5823 so down 799 pips !

Our ranking article yesterday was about Currency ETF’s and today I like to show you ranking on Spot currencies with more choice of currencies to rank than the ETF’s.

There are many possibilties to rank strength and weakness of currencies and recalculate it to a friendly number, while market speed is a seceond factor to count.

The currency can be strong trending while market speed is not always following.

The strategy for trading is to hold the 2 or more strongest currencies long and the 2 or more weakest currencies short while adjusting per day or per week. 

More nice tools, FX-Index and FX-Movers are on www.2hedge.com