Forex pair ranks from seven cross-currency scores

Eight currencies and 28 pairs

Eight widely traded currencies produce 28 unique cash pairs, and each currency appears in exactly seven of those pairs. Intermarket analysis, in this construction, means reading each major through the other seven so a single-pair decision sits inside that full eight-currency, 28-pair context.

Editorial: TradersWeek treats every cash pair as a translated spread. The pair is scored as the difference between two currency scores, not as an isolated momentum reading.

Currency translation into underlying scores

Currency translation converts a pair's momentum into signed base and quote contributions, then adds those signed readings into one currency score. A pair's smoothed momentum is assigned as a positive contribution to the base currency and an equal negative contribution to the quote currency.

An underlying-currency score is the summed, optionally scaled strength of one major versus the other seven majors. The score is the sum of the signed contributions across the seven pairs that contain the currency. Quote-sign reversal subtracts the pair reading when the scored currency is the second symbol, because a decline in that pair is strength for the quote.

One documented scaling step multiplies the seven-pair sum by 1,000 and divides by seven so the eight currency scores can be compared and sorted.

The input momentum reading is a three-bar average of the fractional close change over 13 bars. Both the bar interval and the lookback length can be changed.

Pair-strength scores and the ranking

A pair-strength score is the difference between the two underlying-currency scores that make up a tradable pair. It is the first currency's score minus the second currency's score, and the resulting 28 pair scores are ranked against one another.

The construction is framed as a way to choose among the 28 pairs by relative rank, not as a complete entry-and-exit procedure.

Rotation follows changing ranks

Rank rotation orders the 28 pairs by constructed strength and watches which names climb or fall in that order, instead of acting only on the current top and bottom.

Extreme strongest or weakest ranks are treated as late information, so the usable object is a change in score momentum or a move up or down in the ranking.

Shared exposure and a confirmation rule

Two different pairs can encode the same directional exposure to one underlying currency, so simultaneous positions need a shared-currency check.

One confirmation rule used with the construction is that one currency score is above zero and rising while the other is below zero and falling.