ERO - September 2020: Forex Relative Valuation And Trading Opportunities
As you know, once a week, Splendid Exchange looks at 29 currencies in search of the evidence of popular delusions and the madness of crowds. The idea is to find anomalies and bullish or bearish divergences that will break the trend, not prolong it. It is a painful exercise, but also highly rewarding.
In order to find the most overbought and oversold currency, I conduct five econometric studies: over-extension analysis, secular performance analysis, oil correlation review, economic divergence analysis and effective exchange rate study. Additionally, I look at traders' positioning to understand