Using the Currency Strength Indicator & Currency Array as US Dollar Sells Heavily!
The US dollar has sold heavily in recent sessions. This creates clear opportunities. The currency strength indicator and currency array reveal it early. These Quantum tools rank USD weakness. Traders spot relational shifts fast.
In this video, we explain how to use the currency strength indicator and the currency array indicator together, as they reveal opportunities to sell the US dollar. The two indicators are part of the Quantum Trading currency dashboard with the currency matrix and the currency heatmap, then completing the full complement of MT5 indicators for trading forex.
Here is a great example of the importance of understanding the universal market sentiment. The market is selling the US dollar across the US dollar complex, and so trading with the flow of sentiment is a lower-risk proposition. As we can see, this is clearly evident in the currency array, as is the strength of the momentum in the pairs. In addition, the currency strength indicator reveals a very strong negative sentiment towards the US dollar, as evidenced by the steepness of the lines, with the Canadian dollar and other commodity currencies, such as the Aussie and New Zealand dollars, also being bought strongly.
Currency Strength Indicator Highlights USD Selling
The currency strength indicator ranks currencies live. USD drops sharply in rankings. This signals heavy selling pressure. Extremes show overextension. Volume price analysis (VPA) confirms—high volume on down moves validates conviction. Quantum’s indicator on MT5 or NinjaTrader includes alerts for timely action.
Currency Array Adds Relational Depth
The currency array shows cross-pair dynamics. USD weak across majors. Safe-havens like JPY or CHF strengthen. Risk-on currencies hold or gain. This visual grid exposes sentiment. Quantum array complements the strength indicator for fuller context.
Practical Trading Insights
USD selling favors short dollar positions. Watch USD/JPY or EUR/USD. Pullbacks on low volume offer entries. Avoid counter-trend longs without reversal volume. Anna Coulling’s VPA approach with Quantum tools turns weakness into disciplined trades.
Heavy USD selling creates momentum. Currency strength indicator and array lead the way. Quantum tools make spotting and trading it reliable. Stay aligned with volume for consistent results.
USD/JPY Trading Strategies: Key Approaches for the “Guppy”
USD/JPY (often called “Guppy”) is one of the most liquid forex pairs. It combines the US dollar (world reserve currency) with the Japanese yen (safe-haven). Low spreads and 24/5 trading make it popular for day traders, swing traders, and carry traders. Volatility comes from interest rate differentials, risk sentiment, and central bank policy (Fed vs BoJ).
Current context (January 13, 2026): Pair around 143-144, consolidating after 2025 yen weakness. BoJ normalization vs Fed pause creates uncertainty. Long-term bearish bias on JPY from rate gaps.
1. Carry Trade Strategy (Long-Term Favourite)
- Concept: Borrow low-yield JPY to buy high-yield USD. Earn positive carry (interest differential).
- When to Use: In risk-on environments with stable rates (BoJ ultra-low, Fed higher).
- Entry: Long USD/JPY on pullbacks to support (e.g., 140-142 zone) with volume confirmation.
- VPA Confirmation: Rising prices with increasing volume—conviction in uptrend.
- Risk: Sudden risk-off (yen surge) unwinds carry fast.
- 2026 Outlook: Favourable if Fed holds/cuts slowly vs BoJ hikes.
2. Risk Sentiment Strategy (Short-Term/Swing)
- Risk-On: Long USD/JPY—equities rise, yen weakens.
- Risk-Off: Short USD/JPY—yen strengthens as a safe-haven.
- Signals: Watch equity indices (S&P/Nikkei) and VIX. Quantum currency strength indicator ranks JPY high in risk-off.
- Example: Equity drop → short USD/JPY on high volume down candles.
- VPA Tip: High volume on yen strength confirms safe-haven flow.
3. Trend Following with VPA
- Concept: Follow established trends using volume price analysis (VPA).
- Setup: Higher timeframe (daily) for bias. Enter on lower timeframe pullbacks.
- Confirmation: Rising/falling prices with increasing volume = trend conviction. Divergence (price extreme on low volume) = potential reversal.
- Quantum Tools: Trend Monitor aligns direction. VPOC for key levels.
4. News/Event Trading
- Key Events: Fed minutes/FOMC, BoJ meetings, US NFP, Japan CPI.
- Approach: Wait for release. Trade breakout on high volume confirmation.
- Avoid: Pre-news positioning—volatility spikes cause whipsaws.
Risk Management Essentials
- Stops beyond recent swings or VPOC.
- Position size small—pair can gap on news.
- Trail stops on volume-confirmed continuation.
USD/JPY rewards patience and relational thinking. Combine VPA with Quantum indicators (currency strength/matrix) on MT5/NinjaTrader for edge. Current bias: Mild bullish USD if risk-on holds, but watch yen safe-haven surges.
Test strategies on demo. Trade the pair’s personality—low noise, high liquidity!
The US Dollar Index (DXY): How It’s Constructed and Why Its Euro Weighting Makes It Imperfect
The US Dollar Index (DXY) is the benchmark for measuring USD strength. Traders watch it closely. It influences forex, commodities, and equities. But the DXY has limitations. Its heavy euro weighting distorts the picture. Volume price analysis (VPA) helps see beyond it.
How the DXY Is Constructed
The DXY launched in 1973 after Bretton Woods collapse. Intercontinental Exchange (ICE) manages it. It’s a geometric weighted average of USD against six currencies:
- Euro (EUR): 57.6%
- Japanese Yen (JPY): 13.6%
- British Pound (GBP): 11.9%
- Canadian Dollar (CAD): 9.1%
- Swedish Krona (SEK): 4.2%
- Swiss Franc (CHF): 3.6%
Base value 100 in 1973. Above 100 = stronger USD vs basket. Below = weaker.
Weights reflect 1970s trade patterns. Updated once in 1999 for euro launch. No changes since.
Why the Heavy Euro Weighting Makes It Imperfect
Euro’s 57.6% dominance is the main flaw:
- Overrepresents Europe: Eurozone ~20% of US trade. But it drives over half the index.
- EUR/USD Inverse: DXY moves heavily opposite EUR/USD (most traded pair).
- Underrepresents Asia: No Chinese yuan (CNY) or other emerging currencies. China is US’s top trade partner.
- Outdated: Weights frozen since 1999. Global trade shifted (Asia rise, eurozone stagnation).
Result: DXY can weaken on euro strength even if USD strong vs others. Or mask USD weakness if euro weak.
Trading Implications and VPA Insights
DXY is useful but incomplete. Watch broader strength with Quantum currency strength indicator. VPA on DXY futures confirms conviction—high volume moves validate direction. Low volume extremes warn of reversals.
Anna Coulling’s VPA approach with Quantum tools sees beyond DXY flaws. Relational indicators rank true USD performance.
The DXY is a standard gauge. But euro weighting makes it imperfect. Quantum tools deliver fuller picture. Trade USD with relational VPA for clearer insights.
By Anna Coulling