EURUSD and USD/JPY: Targets Achieved +162 Pips

If USD/JPY was part of the weekly 19 currency pair trade line up, then its place would sit last along with EUR/USD and alongside CAD/CHF. At least for this week due to the positions of USD/JPY and EUR/USD.


Top ranking earns the distinction to easy trade, many pips and no worries. A horrible position currency and not clear to entries and targets earns last place as the struggle for the trade isn’t worth the effort. Many more currencies exist.


Both USD/JPY and EUR/USD trades posted yesterday performed perfectly yet what was required was EUR/USD 1.1444, DXY 95.06 and USD/JPY 113.90 to resolve itself. This resolution took 1 day. To embark on the trade Sunday or Monday without settlement is to roll-the-dice gamble.


As our many, many years of writings on Fxstreet demonstrated, we don’t gamble nor speculate. But we also don’t use faulty charts, indicators, stops nor concerned with the latest market talk to central banks, interest rate changes and economics. All this is irrelevant to the price. Our only concern is entry, exit and maximum profits.


USD/JPY


The trade. Short 115.10 and 115.18 to target 114.54. Long 114.54 to target 114.81.
The results. 115.06 to 114.51 or +55 pips. Long 114.54 to 114.81 or +32 pips. Total 2 trades, +87 pips.


USD/JPY weekly Range 114.11 to 115.06 or 93 pips. We profit 87 of 93.


EUR/USD


The trade. EUR/USD on a break at 1.1388 targets 1.1331. Long 1.1331 to target 1.1359.


The Results. 1.1388 to 1.1326 or +62 pips. Long 1.1331 to 1.1359 or +3 pips. Ongoing trade.

EUR/USD weekly range: 1.1433 to 1.1326 or 107 pips. We profit 64 pips or 60% of traded pips. So far.


EUR/USD +USD/JPY total +152 pips.

Brian Twomey

EUR/USD Vs USD/JPY and DXY

EUR/USD began the week at 1.1414 and USD/JPY at 114.26. Both are the exact same exchange rates. DXY began the week at 95.15 and 8 pips above the 5 year average at 95.06.


DXY tops at 98.00 and 99.00 technically reverts to USD/JPY 117.00’s and EUR/USD at current 1.1072 target. The 117.00 problem is USD/JPY is not supported above 116.22 and 116.42. Both represent multi year highs dating to 2011 and beyond.


USD/JPY is massively overbought from short and longer dated averages while all averages are dropping. A short only strategy is required for USD/JPY as longs are impossible.


EUR/USD averages continue to rise and next vital is 1.1518 at the 5 year average. EUR/USD 1.1387 held yet again this morning at 1.1391 then bounce to 1.1415.
DXY next above is located at 95.20, 95.60, 96.99, 97.77 and 98.07. Below 94.85, 94.03 and 94.08.


The EUR/USD and USD/JPY relationship began at most vitals 1.1444 and 113.90. A 50/ 50 tossup to 1.1444, 113.90 and DXY 95.06.


USD/JPY weekly Trade


Short 115.10 and 115.18 to target 114.54. Long 114.54 to target 114.81.


EUR/USD on a break at 1.1388 targets 1.1331. Long 1.1331 to target 1.1359.


DXY break below 95.06 offers a green light to long every non USD pair and short all USD to include EM currencies.


The EUR/USD, USD/JPY and DXY relationship is tight and boxed by moving averages.

Brian Twomey

FX Weekly: DXY V EUR/USD, USD/CHF, USD/CAD

As DXY broke below its 5 year average at 95.25 last Wednesday, EUR/USD traded exactly to its 3 year monthly average at 1.1480 and just ahead of the 5 year average at current 1.1517. EUR/USD averages continue to rise and the downside target is now located at 1.1070.


While EUR/USD’s response to the DXY break was correct and immediate by shooting higher, USD/JPY’s downside answer was a laggard move by 2 full trade days. USD/JPY traded above its vital point Wednesday at 114.03 then bounced, 113.96 Thursday then bounced and finally broke 113.90 on Friday. USD/JPY achieved lows Friday at 113.46 or 44 pips.


USD/CHF’s immediate reaction to DXY was seen by the break at 0.9203 Wednesday and eventually bolted 112 pips to 0.9091 lows Thursday.


USD/CAD as leader of the big 3 USD pairs was already in its downtrend Tuesday by the break lower at 1.2665 and traded 215 pips to 1.2450 lows.


EUR/USD from the 1.1387 break to 1.1480 traded 93 pips, DXY traded 62 pips lower to 94.63, USD/CHF achieved 112 pips and 44 pips for USD/JPY. Rare day for DXY as market leader due to the same comparable ranges to EUR/GBP but the 95.25 break was overwhelming and required immediate movements from all currencies and market instruments.


As stated over many years, USD/JPY was born and lives its trade life as a horrible currency pair and this explains why USD/JPY was never included in the weekly trade lineup.


DXY’s new 5 year average level is located at 95.06. The 5 year average is a mid point to tops at 98.00’s and 99.00’s Vs bottoms at 92.00’s and 91.00’s. DXY above or below 95.00 represents a 400 pip range.


USD/CHF


USD/CHF at current 0.9100, trades at DXY 91.00 bottoms. To travel higher, USD/CHF must break 0.9138, 0.9183 and 0.9240. A brick wall of averages exist from 0.9400’s to 0.9600’s. In order for USD/CHF to test 0.9400’s and 0.9500’s, DXY must trade to tops at 98.00’s and 99.00’s.


The current 95.00 DXY and 0.9100 USD/CHF relationship holds right around a 300 pips range and will remain permanent for the distant future. For DXY to trade to 92.00’s and 91.00 bottoms then USD/CHF must trade to 0.8900’s and 0.8800’s.


The Week


Currency and all markets are tied to EUR/USD 1.1517 and DXY 95.06. An average trade week is ahead without any dramatic moves. On the GBP side, best trades are located in GBP/USD, GBP/JPY and GBP/NZD while nothing special exists to GBP/CHF, GBP/AUD and GBP/CAD. GBP/JPY top at reported 157.00’s traded to 155.00’s.


Both EUR/USD and USD/JPY begin the week in terrible positions and EUR/USD is at the bottom of weekly trade rankings. NZD/USD and NZD cross pairs begin the week oversold as well as AUD/USD and AUD cross pairs. AUD pairs are the better trades as NZD has been a dead issue since November. NZD/USD last week was the worst performing currency to the DXY 95.25 break.


USD/JPY


Last week’s target achieved 114.85 however entries never materialized. USD/JPY trade last week is written as no trade. This week’s trade is a pass until a viable entry exists. Stay tuned.

Brian Twomey

DXY Breaks 5 Year Average, G28, Gold and Yields

As written many times over months, DXY’s 5 year average at 95.25 broke lower today and dead stopped at 94.95 or the mid point from 95.25 and next vital level below at 94.70. To continue, DXY must break 94.70 then 94.20 and 93.71. The final bottom is located at 92.00’s and 91.00’s.


DXY’s break sent non USD higher to not only overbought but big levels approaches. GBP/USD next is 1.3715 and 1.3760. Short is the way forward.


EUR/USD


As written Sunday, EUR/USD broke 1.1387 and traded to 1.1422 target then continued higher to 1.1452. If DXY travels lower then EUR/USD targets 1.1473, 1.1509 and 1.1545. Below break at 1.1436 coincides to DXY 95.25. Below EUR/USD targets 1.1363 and 1.1290.

USD/JPY


Deeply oversold USD/JPY next below is located at 113.97. Failure to break, weekly target for longs remains 115.90 and 116.01. Target at 114.85 achieved however lows traded to 114.30’s.


AUD/USD and NZD


AUD/USD next above 0.7303, 0.7332 and 0.7351. Break lower at 0.7356 targets much lower. As written many times, NZD/USD big break 0.6840 and 0.6854. NZD/USD dead stopped 0.6856. Next above 0.6867. Watch overbought AUD/JPY 82.69 for lower and NZD/JPY 78.25.


GBP/JPY 157.00’s trades at the top of multi year range.


CHF/JPY 123.96 for lower.


USD/CAD V CAD/JPY


CAD/JPY remains deeply overbought to follow its brother AUD/JPY. Look for CAD/JPY target at 90.96. Deeply oversold USD/CAD same old story, 6 months later. Vitals remain at 1.2262, 1.2647 and 1.3026.

Gold


GOLD as written December 12 when Gold traded 1783. Gold traded to 1833 highs January 3rd and achieved lows at 1781 on January 7. Trade instruction Targets above 1805.10 and excellent short entries are found at 1818.48, 1864.53, 1874.58 and 1912.09.


Yields, 2, 5, 10 and 30 Year.


As written December 29, the 2 year range was located from 0.3376 to 0.8871.Above 0.8871, targets the range from 0.8871 to 1.2865. The 2 year achieved 0.9497.


The 5 year trades 1.0870 to 1.4927. Above 1.4927 targets an 8 point range from 1.4927 to the 5 year monthly average at 1.5744. Highs achieved 1.5565.


The 10 year traded a range from 1.4564 to 1.8095. Highs achieved 1.8060 and the range held.


The 30 year trades 2 ranges from 1.7987 to the 1 year average at 2.0261 then the 3 year at 2.0581 and 2.3126. Highs achieved 2.149.

DXY 95.25 is the overall driver to currency and markets

Brian Twomey

FX Weekly: EUR/USD, USD/JPY, CHF/JPY, GBP/USD, CAD

EUR/USD begins the week 27 pips below the next vital level at 1.3787. Above, targets 1.1414 and 1.1422. EUR/USD story remains the same over week. Longer dated averages are oversold and driving EUR higher. The rising 5 year average is now located at 1.1514 and a target at 1.1064.


The only positive to EUR/USD shorts to longer term targets is EUR/USD trades below all monthly averages dating to 10 years yet all averages are rising. The second positive is January enters EUR/USD’s traditional seasonal downtrend. Dating to 1995, EUR/USD records 15 down months for January and 8 up months. For 2019 ended the month with a Doji candle.


EUR/USD’s downtrend to gain speed must break 1.1289 then 1.1211. The overall trade strategy is long drops as more pips will profit on the upside.


CHF/JPY


CHF/JPY is held higher by 123.98 and 120.65. Both are overbought as well as every average dating to 100.00’s from 2002. CHF/JPY is a USD pair as it correlates to USD/JPY at +90%.


USD/JPY and Weekly Trade


USD/JPY longs last week targeted 115.53 then short and USD/JPY for the 2nd time in 8 weeks, we were forced to add 1 lot. USD/JPY’s problem in the last 2 weeks is not longs as longs achieved targets but the problem is shorts. From 115.53, USD/JPY traded a free money bonus by 80 pips higher to 116.34.


For the 2nd time in 8 weeks of USD/JPY weekly trades, add 1 lot was forced at 116.34. Two options then existed. Either trade both lots to target or exit the 2nd lot at 15.53.


Addition of the 2nd lot at 116.34 to 115.53 + 81 pips. Longs from 115.08 to 115.53 then +45 pips. Total 2 trades +126 pips. Total for 8 trades + 1026 pips. USD/JPY lows for last week achieved 115.46


USD/JPY short 115.90 and 116.01 to target 114.85. Long 114.85 to target 115.43.


DXY Vs USD/JPY


USD/JPY begins the week fairly neutral from overbought over the past 2 weeks while DXY achieved lows last week at 95.62 and 95.56 on the previous week. DXY 95.25 remains the big break to target 92.00’s. Both USD/JPY and CHF/JPY then drop substantially to USD/JPY 110.00’s and CHF/JPY 118.00’s and 117.00’s. Both USD/JPY and CHF/JPY are miles overbought.


JPY Cross Pairs


All JPY cross pairs remain massive overbought to include GBP/JPY. Best trades this week: EUR/JPY, GBP/JPY and CAD/JPY. AUD/JPY faces headwinds at 83.56 and 84.46. NZD/JPY is least favored.


GBP/USD


GBP/USD levels are located at 1.3298, 1.3365, 1.3448, 1.3492 and 1.3629. Not only is the 5 year average at 1.3124 but many averages exist at 1.3100’s. GBP/USD averages are rising and the same story as EUR/USD.


GBP/AUD remains a problem currency and EUR/AUD is the better trades despite tiny ranges.


USD/CAD


Vital points are found at 1.2250, 1.2467, `1.2676, 1.2851 and 1.3027.


For interested, on my blog at btwomey.com is posted 19 currency trades and results from last week and +1200 pips. For 6 currency pairs were completed in 3 weekly trades each while 4 currencies completed in 2 trade per currency.


While I maintain profit is realized from at least 50% of all traded pips. 50% is factored from weekly trades in each of 17 weeks in 2019. Markets are dead today therefore 50% must be much higher today.


Most fascinating is the perfection and consistency to trades over many years but I worked extremely hard for this accuracy. We’re doing 1000 pips per week effortlessly each and every week.

Brian Twomey

FX Trade Results Feb 22 -June 28 2019

Dear all,

I began tracking weekly trade results in 2019 for 17 weeks or 4 months on 12 currency pairs to understand the context to what I’m doing. Profit by 50% to all traded pips is the result of longs and shorts per currency pair.

I no longer track and report below stats because I’m just as perfect today to entries, targets and weekly consistency on 19 currency pairs. The profit pips and weekly pip profit averages are higher. Plus what a job every Friday as I don’t use a computer. Took hours by hand to track trades, results and factor averages.

The weekly trades every week were all posted on Sunday and reported results here on my blog for verification.

Most fascinating is the perfection and consistency but I worked extremely hard for this accuracy. Tell me Goldman Sachs, hedge funds or any bank better than me. I doubt it.

Actual Profit Pips = 23,021

Actual Pip Profit Average 1292

We profit on Average 1292 pips per week on 12 currency pairs. We maintain profit at least 50% of all traded pips on 12 currency pairs. Mathematically, SD on 17 weeks and 12 currency pairs = 650.40 and 1/2 of 1292 = 646.

Further, Signal/ Noise Ratio Vs Variation equates to 1.98 Vs 0.50. The Signal is perfect and high Vs its 50 % Variation. We are dead on track to report profit on 50% of all traded pips.

Weekly Pips Totals for 17 weeks

911

1450

1203

1187

2

1162

126

1979

794

957

1033

1127

1700

1962

1979

1800

2592 =1292 Pips Average

Brian Twomey

Weekly Trades JPY Cross Pairs

Forget JPY cross pairs. Totals 915 pips. To include JPY cross pairs then 1258 Pips. 3 trades running, GBP/JPY, GBP/CAD and GBP/NZD.

NZDJPY

Short Anywhere or 78.81 and 78.90 to target 78.26.
Highs 79.20, Lows 77.90
target 78.26 achieved +64 pips

2nd Leg Short below 78.17 to target 77.80 +37 pips
3rd Leg Long 77.80 to target 78.08.
NZDJPY totals +101 pips


CADJPY

Short Anywhere or 91.01 to target 89.61
Highs 91.64, Lows 90.27
From 91.01, +74 pips


EURJPY

Short Anywhere or 131.15 to #target 130.22
Highs 131.59, Lows 130.66
trade runs +48 pips

AUDJPY

short Anywhere or 83.69 to target 82.66

Highs 84.34, Lows 82.66, target achieved +168 pips

Brian Twomey

Weekly Trades and Results

Currency markets this week applied to 19 currency pairs contained 2 common themes to begin the week. Range problems and weekly starting positions. Weekly start position begins the week as overbought, oversold or neutral.


The breakdown to range and starting positions as most vital is a 40 to 50 pip differential to entries yet not to every currency pair. USD/JPY begins the explanation.


USD/JPY longs this week targeted 115.53 then short and USD/JPY for the 2nd week running traded overbought to higher overbought. USD/JPY’s problem in the last 2 weeks is not longs as longs achieved targets but the problem is shorts. From 115.53, USD/JPY traded a free money bonus by 80 pips higher to 116.36.


Longs ran +45 pips so shorts are off by 35 pips. Add 1 lot to 116.36, USD/JPY traded to lows at 115.62 or +74 pips. Hold the 1st lot at +45 then +119 pips and running to target. Exit the 1st lot at +45, the 2nd lot then runs to target.


USD/JPY 80 pips. By USD/JPY as an anchor pair misses by 80 pips then JPY cross pairs can’t possibly miss an entry by the same 80 pips. JPY cross pairs trade inside 2 anchor pairs such as EUR/JPY trades between EUR/USD and USD/JPY.

WEEKLY Trades

EUR/USD Break Point 1.1446, above targets 1.1529.
Strategy. Short 1.1415 and 1.1425 to target 1.12980. Must cross 1.1395, 1.1375, 1.1355, 1.1335, 1.1315 and 1.1295. Long 1.1280 to target 1.1321. 


EUR/JPY Break Point 129.83, below targets 129.30.


Strategy. Short Anywhere or 131.15 to target 130.22. Must cross 130.89, 130.76, 130.63, 130.50, 130.37, 130.24 and 130.11. Long 130.22 to target 130.49. 


CAD/JPY Break Point 89.41, below targets 89.01.


Strategy. Short Anywhere or 91.01 to target 89.61. Must cross 90.82, 90.63, 90.44, 90.25, 90.06, 89.87 and 89.68. Short below 89.41 to target 89.01. Long 89.01 to target 89.26. Cautious long 89.61 to target 89.91.


AUD/JPY Break Point 82.50, below targets 82.18.


Strategy. Short Anywhere or 83.69 to target 82.66. Must cross 83.48, 83.27, 83.06, 82.85 and 82.64. Short below 82.50 to target 82.18. Long 82.18 to target 82.39. Cautious long 82.66 to target 82.94. 


AUD/USD. Break Point 0.7273, above targets 0.7343.


Strategy. Short 0.7263 to target 0.7183. Must cross 0.7243, 0.7223, 0.7203 and 0.7183. Long 0.7183 to target 0.7233. Or Long above 0.7273 to target 0.7343. Short 0.7343 to target 0.7203. 


EUR/AUD Break Point 1.5738, above targets 1.5792.


Strategy. Long 1.5639 and 1.5630 to target 1.5693. Must cross 1.5657, 1.5675, 1.5693. Long above 1.5738 to target 1.5792. Short 1.5792 to target 1.5756. Cautious short 1.5693 to target1.5648. 


NZD/JPY Break Point 78.17, below targets 77.80. 


Strategy. Short Anywhere or 78.81 and 78.90 to target 78.26. Must cross 78.63, 78.45 and 78.27. Short below 78.17 to target 77.80. Long 77.80 to target 78.08. Cautious long 78.26 to target 78.53. 


USD/CAD Break Point 1.2690, above targets 1.2795.  


Strategy. Long 1.2585 and 1.2577 to target 1.2675. Must cross 1.2600, 1.2615, 1.2630, 1.2645, 1.2660 and 1.2675. Long above 1.2690 to target 1.2795. Short 1.2795 to target 1.2735. Cautious short 1.2675 to target 1.2615. 


NZD/USD Break Point 0.6891, above targets 0.6936. 


Strategy. Short 0.6869 and 0.6874 to target 0.6792. Must cross 0.6847, 0.6825, 0.6803 and 0.6792. Long 0.6792 to target 0.6847. 


AUD/CHF Break Point 0.6687, above targets 0.6720. 


Strategy. Long 0.6619 and 0.6610 to target 0.6677. Must cross 0.6635, 0.6651, 0.66 7 and 0.6672. Long above 0.6687 to target 0.6720. Short 0.6720 to target 0.6695. Cautious short 0.6677 to target 0.6653. 


NZD/CHF Break Point 0.6335, above targets 0.6397. 


Strategy. Long 0.6226 and 0.6218 to target 0.6294. Must cross 0.6246, 0.6267 and 0.6286. Short 0.6294 to target 0.6252. 


CAD/CHF Break Point 0.7246, above targets 0.7298. 


Strategy. Long 0.7158 and 0.7149 to target 0.7229. Must cross 0.7175, 0.7192, 0.7209 and 0.7214. Long above 0.7246 to target 0.7298. Short 0.7298 to target 0.7264. Cautious short 0.7229 to target 0.7176. 


EUR/NZD Break Point 1.6611, below targets 1.6537. 


Strategy. Short 1.6675 and 1.6685 to target 1.6620. Must cross 1.6657, 1.6639 and 1.6621. Short below 1.6611 to target 1.6537. Long 1.6537 to target 1.6683. Cautious long 1.6620 to target 1.66 5. 


                 GBP


Favored trades this week: GBP/USD, GBP/JPY, GBP/NZD, GBP/CHF, GBP/CAD, GBP/AUD.


GBP/USD Break Point 1.3499, below targets 1.3375. 


Strategy. Short 1.3570 and 1.3587 to target 1.3516. Must cross 1.3553, 1.3536 and 1.3519. Short below 1.3499 to target 1.3375. Long 1.3375 to target 1.3429. Cautious long 1.3516 to target 1.3552. 


GBP/JPY Break Point 153.14, below targets 152.52.


Strategy. Short Anywhere or 155.78 to target 153.74. Must cross 155.58, 155.38, 155.18, 154.98, 154.76, 154.58, 154.38, 154.18, 154.08, 153.88 and 153.81. Long 153.74 to target 153.95. 


GBP/NZD Break Point 1.9592, below targets 1.9483. 


Strategy. Short Anywhere or 1.9783 and 1.9796 to target 1.9653. Must cross 1.9756, 1.9729, 1.9700, 1.9673 and 1.9646. Long 1.9653 to target 1.9701. 


GBP/CHF Break Point 1.2410, above targets 1.2469. 


Strategy. Long 1.2285 and 1.2278 to target 1.2373. Must cross 1.2299, 1.2313, 1.2327, 1.2341, 1.2355 and 1.2369. Long above 1.2410 to target 1.2469. Short 1.2469 to target 1.2432. Cautious short 1.2373 to target 1.2322.


GBP/CAD Break Point 1.7127, above targets 1.7182.


Strategy. Short 1.7109 and 1.7118 to target 1.7053. Must cross 1.7091, 1.7073 and 1.7055. Long 1.7053 to target 1.7099. Or Long above 1.7127 to target 1.7182. Short 1.7182 to target 1.7146. 


GBP/AUD Break Point 1.8562, below targets 1.8533.


Strategy. Short anywhere or 1.8613 and 1.8620 to target 1.8569. Must cross 1.8599, 1.8585 and 1.8573. Short below 1.8562 to target 1.8533. Long 1.8533 to target 1.8555. Cautious long 1.8569 to target 1.8591. 

WEEKLY Trade Results

          EUR/USD, AUD/USD, GBP/USD, USD/CAD, NZD/USD

EUR/USD short 1.1415 and 1.1425 to target 1.1280. Highs 1.1383, lows 1.1272. From 1.1383 to 1.1280, +103 pips.
2nd Leg Long 1.1280 to target 1.1321. Highs 1.1345. +41 pips.
EUR/USD Total +144.


AUD/USD Short 0.7263 to target 0.7183. Highs 0.7276, lows 0.7143. From 0.7263 to 0.7183, +80 pips.
2nd Leg Long 0.7183 to target 0.7233.Lows 0.7143.
AUD/USD total +80.


GBP/USD Short 1.3570 and 1.3587 to target 1.3516. Highs 1.3597, target achiebed at 1.3516 but lows 1.3490. From 1.3587 to 1.3516, +71 pips.
2nd GBP/USD, Short below 1.3499 to target 1.3375.
GBP/USD total +71.


USD/CAD Long 1.2585 and 1.2577 to target 1.2675. Lows 1.2629, highs 1.2675 achieved.
2nd Leg, Long above 1.2690 to target 1.2795. highs 1.2810. Target achieved +105 pips.
3rd Leg Short 1.2795 to target 1.2735, lows 1.2749. +46 pips.
USD/CAD total +151 pips.


NZD/USD Short 0.6869 and 0.6874 to target 0.6792. Highs 0.6855, lows 0.6733. From 0.6855 to 0.6792, +63 pips.
2nd Leg Long 0.6792 to target 0.6847.
NZD/USD Total +63.


GBP/CHF, AUD/CHF, NZD/CHF, CAD/CHF


GBP/CHF Long 1.2285 and 1.2278 to target 1.2373, Lows 1.2314, Target 1.2373 achieved, +59 pips.
2nd Leg, Long above 1.2410 to target 1.2469, Highs 1.2456, +46 pips.
3rd Leg, Short 1.2469 to target 1.2432. Highs 1.2455, lows 1.2432. +23 pips.
GBP/CHF total +128 pips.


AUD/CHF Long 0.6619 and 0.6610 to target 0.6677. Lows 0.6597, target achieved. +67 pips.
2nd leg Long above 0.6687 to target 0.6720.. Not triggered.
3rd Leg Cautious short 0.6677 to target 0.6653. Target achieved +24 pips.
AUD/CHF Total +91.


NZD/CHF Long 0.6226 and 0.6218 to target 0.6294, lows 0.6210, highs 0.6261, +51 pips and running.
2nd leg Short 0.6294 to target 0.6252. Not yet triggered.


CAD/CHF Long 0.7158 and 0.7149 to target 0.7229. Not triggered yet.


EUR/AUD and GBP/AUD


EUR/AUD Long 1.5639 and 1.5630 to target 1.5693, Lows 1.5576, target achieved from 1.5630, + 46 pips.
2nd Leg Long above 1.5738 to target 1.5792. Highs 1.5810. target achieved +54 pips.
3rd Leg Short 1.5792 to target 1.5756. Target achieved, +36 pips
EUR/AUD total +90.


GBP/AUD not recommended. Here’s why. Short anywhere or 1.8613 and 1.8620 to target 1.8569. Highs 1.8893. GBP/AUD isn’t trade able.


EUR/NZD and GBP/NZD


EUR/NZD Short 1.6675 and 1.6685 to target 1.6620.Highs 1.6670, lows 1.6540. From 1.6670 to 1.6620, +50 pips.
2nd Leg Short below 1.6611 to target 1.6537, Lows 1.6541. + 96 pips.
3rd Leg Long 1.6537 to target 1.6683, lows 1.6541, target achieved +46
EUR/NZD total +192.


GBP/NZD Short Anywhere or 1.9783 and 1.9796 to target 1.9653. High 2.00


GBP/JPY Short Anywhere or 155.78 to target 153.74, Highs 157.76. Lows 156.11. Target holds.


Total Pips 915 so far.


Brian Twomey

Trade Service

Titled trade service for interested to find the receiving end to trades. I never considered myself a trade service nor do I solicit traders to join as my intention was never to become a trade service. It came by accident about 7 years ago to assist a few traders and exporters. By trade postings and results, more traders came and many remained over many years. I merely assist traders interested in trades.

Now and then a horrible week exist but never worry as only an entry was missed but never a target so trades are repaired to profit or at minimum, to breakeven. Over time, traders are highly profitable and the reason to stay on.

The price is $300 per month for 1000 ish pips per week and more on most weeks. See June and July 2019 for profit methodologies. I also know as many informed, $300 is quite low in relation to trader profits. This isn’t a get rich quick scheme or profit center in monthly revenue. God blessed me and I return blessings to those in need in my community.

Weekly Currency trades contain 4 trades per 18 currency pairs in order to trade continuously throughout the week. Possibly only 2 trades may exist but we’re prepared for any market event including possible crashes.

On 18 currency pairs, 4 trades each is 72 weekly trades. If only 2 trades exist per currency pair equates to 36 trades.

As seen here over many years, trades are not only self explanatory but entries and targets are provided as well as vital levels in order to watch the trades but also to exit at any point along the way. All account sizes are accommodated in this regard.

Weekly profit per currency pair is around 150 pips for 2 trades per currency pair. 1000 pips per week is quire common. Our best week was 2500 pip February 2019 at Brexit time but we traded 10 and 12 currency pairs then.

Essentially, we trade the entire currency market every week and certain EM currencies. Those busy during the week and no time to watch charts or prices then our trades are perfect.

Daily trades amount to 80 trades per week for 8 currency pairs, 90 to include AUD/EUR or EUR/AUD. Day trades represent extra pips for the week while waiting for weekly entries and targets.

All required for traders is click on entry and target and this is carefully factored every week and over many, many years.

After 17 years and much time and effort to study the currency price, its understood and mastered. We trade numbers, not charts, nor are stops required. As I always said , whatever you think you know or thought you knew must be discarded at the door because its all wrong.

We’re miles past and far more experienced than the trading crowds, trade services and crooked websites. This is my benefit and my hindrance because I’m out of step to the trading crowds.

No need for trade rooms, nor am I able to post on youtube. Post what?, numbers. Crowds require pictures when this is not used by us. I’m not here to waste your time as I am a serious trader to assist other serious traders.

Brian Twomey, brian@btwomey.com

USD/JPY Vs Yield Levels and Correlations

The 2 year yield traded Monday and Tuesday 4 points from 0.7574 to 0.8028 and 0.7527 to 0.8002. The monthly range is located from 0.3376 to 0.8871. The 2 year held 2 supports at 0.6123 and 0.7497. The 2 year hit bottom support, rose and maintained its range. The daily Treasury yield rates reported 0.77 Tuesday and 0.78 Monday at its normal 7:30 am EST start time.


The 5 year yield traded Monday 7 points from 1.2916 to 1.3696 and 1.3486 to 1.3969 or 4 points. The monthly range is located from 1.0870 to 1.4927. The 5 year from 1.24 broke above 1.2898 and traded to highs at 1.3969. Daily Treasury offered a green light from Monday and Tuesday’s reported 1.37. The 5 year held its range.


The 10 year traded Monday from 1.5310 to 1.6410 or 11 points then Tuesday 1.6130 to 1.6860 or 7 points. The 10 year at 1.53 was oversold from its monthly mid point at 1.63291 and bounced to trade just prior to its resistance point at 1.72110. The monthly range is located from 4564 to 1.8095. The Treasury reported the 10 year at 1.63 Monday and 1.66 Tuesday.


The 30 year traded 1.901 to 2.0450 or 14 points Monday then 2.009 to 2.102 or 9 points. Daily Treasury reported 2.01 Monday and 2.07 Tuesday. The monthly range is located from 1.7987 to the 1 year average at 2.0261 then 2.0581 and 2.3126.The 30 year was oversold from 1.90, broke above 1.9124, 1.9692 and 2.0261 resistance to trade from 2.0261 to 2.0581 – 2.3126.


USD/JPY vs Yields


While the 2 year yield ranges from 0.3376 to 0.8871, USD/JPY correlates to 0.3376 at +16% and +19% at 0.8871. The best correlations for the 2 year and USD/JPY are found at 0.32% and 34% at the 4 and 5 year monthly averages. The 2 year fails to explain USD/JPY as correlations impart performance as a question to distance to yield points Vs USD/JPY pip moves.


For interested, on my blog at btwomey.com dating to 2015 is years of yield, interest rates and currency price concepts for many currencies and nation’s yields and interest rates.


And viewed from every possible scenario from simple averages and regression to yield crossovers, FX Points. Yields factored forward, from yield curves to yield slopes.
Every possible figure and factor in FX is located on my blog dating to 2010 and 2011. The end result was the invention in 2015 to today’s interest rate model for day trades and deployed to trade every financial instrument on the planet.


Historically as written previously, USD/JPY drivers to yields are short term yields in the vicinity from 2 to 5 years while the 10 year never factored as Correlation drivers nor suited for trade entries.


USD/JPY correlates to the 5 year yield from the 1 year at 87% and 2 year at 64% then correlations drop like a rock. The 1 year is located at 0.8146 and 2 year at 0.6904.
The 10 year yield then loses correlations to USD/JPY as the 1 and 2 year correlate at 59% and 67% then correlations drop. Those yield levels are located at 1.1545 and 1.4045. Only 50% to yield moves are explained by USD/JPY.


Many yields and yield ranges from 1 to 5 years fail to explain USD/JPY direction and performance as USD/JPY is off kilter to yields by trading at erroneous levels. The moves are quick and short term evidenced by correlations at 1 and 2 year and not to the full set of averages from 1 to 5 years. The worst performer to correlation is the yield 5 year average for all yield maturities. The 5 year should be the best performer.


The 30 year correlates to USD/JPY at 54%.


USD/JPY overall trades overbought and began overbought at weekly starts for the past 3 weeks. USD/JPY is rising despite severe overbought. A lower USD/JPY to 110.00’s and 111.00’s would not only correlate to DXY more correctly but to yields. Until USD/JPY drops then the yield /USD/JPY relations will remain off kilter to correlations.


Treasury Yields


30 year Treasury yield is priced in 32nds and priced at $312.50 for each 32nd or $3,000 per point. One basis point on a 10 year bond is $1000.


A guide


From fraction to decimal,
1/32 = 0.0313,
3/64 = 0.0469,
1/16 = 0.0625,
5/64 = 0.0781.
At 63/64 = 0.9844 then comes 1.0 as a fully traded basis point.


From Fraction to percent,


1/32 = 3.125%
3/64 = 4.687%
1/16 = 6.25%
5/64 = 7.812
63/64 = 98.437%. Then 1.0 as a fully traded basis point.

Brian Twomey

EUR/USD and GBP/USD Long Term

EUR/USD for December and January traded 111 pips from 1.1273 to 1.1384. The reversion to 1.1300’s and a neutral price is driven by 1.1387, 1.1435, 1.1480 and 1.1511. EUR/USD’s problem is overall price drivers are contained within middle monthly averages.


EUR/USD averages lack anything close to uniformity. EUR/USD drops were met by deeply oversold longer dated averages to force EUR higher to neutral 1.1300’s. If EUR/USD averages were orderly and aligned properly, EUR would’ve trended to lower targets at current 1.1057.


The positive aspect to EUR/USD is it trades below every average yet every average is rising ever so slowly and explains EUR/USD slow grind lower. A higher EUR meets a concentration of averages from 1.1387 to 1.1900’s and aligned less than 100 pips apart. EUR 1.1400’s, 1.1500’s and 1.1600’s form a solid steel wall.


The best targets currently are located at 1.1057 then bottoms at 1.0900’s and 1.0800’s. From 1.0900’s assumes DXY trades to its tops at 99.00’s. Also assumes DXY contains 300 pips to travel higher and matches 300 EUR pips to 1.0900’s from 1.1200’s.


EUR/USD’s target is benchmarked by seasonality. Within any given year, traditional EUR/USD downtrends begin in December/ January and ends May/June then begins EUR/USD’s 6 month uptrend.


EUR/USD’s December/ January drop is the result of the European Parliament’s funding of the annual budget beginning normally by December. A traditional lower EUR in January allows funding the budget at a lower cost. EUR has 6 months to achieve targets.


GBP/USD


GBP/USD’s situation is similar to EUR/USD as averages lack uniformity yet averages are positioned to allow GBP a valid trade range. GBP/USD trades 1.3357, 1.3443 and 1.3492. Above 1.3492 becomes 1.3492 to 1.3760. Overall lower range is located from 1.3492 to 1.3298 then a brick wall to averages exists at 1.3100’s.


A lower GBP/USD rises as longer dated averages at 1.3700’s and 1.3800’s trades oversold and forces GBP higher. Overall averages are rising.


Banks target GBP/USD by end 2022 at 1.2500’s. The target at 1.2500’s is pushing the envelope to far and assumes breaks at 1.3193, 1.3180 and 1.3120. A break at 1.3100’s targets bottoms at 1.2700’s and 1.2600’s. GBP/USD lows for the year coincide to UK February / March budgets. GBP/USD failure to break 1.3100’s targets 1.3400’s.


For the week, vital breaks for higher/ lower are located at 1.3492 and 1.3503.

Brian Twomey

FX Weekly: USD/JPY V DXY, EUR/USD, GBP, AUD

Currency markets begin the week with DXY at 95.67 and a 128 pip drop from November’s high at 96.95 and just ahead of vital 97.16. October and November’s monthly averages were located from the 5 year at 95.25 to tops at 98.00’s and 99.00’s.


DXY begins January in a 413 pip range with the 5 year average at 95.06 to 99.19 tops. Next vitals above are located at 96.99, 97.77, 98.07, 98.48 and 98.54. The 5 year is protected by 95.60, 95.42 and 95.20 then many averages at 94.00’s beginning at 94.85 and 94.03. Averages at 94.00’s must break to consider targets at 92.00’s.


DXY’s 5 year average dropped 19 pips while EUR/USD’s 5 year rose 21 pips to current 1.1511 and a rising target now at 1.1056. Essential to the DXY V EUR/USD relationship particularly at most important levels is the structural lead / lag effect to currency prices due to specific ranges for each currency pair.


EUR/USD broke its 5 year first November 10 at 1.1490 then 5 days later on November 15, DXY broke above 95.25. EUR/USD achieved 1.1185 lows 14 days later on November 24 as averages began to rise while DXY achieved 96.91 highs a full month later on December 14 as averages began to drop.


USD/JPY Vs DXY


USD/JPY correlates to DXY at the 110.42 first monthly average at +84% then correlations severely drop to +20%’s- +40% from the 2 to 8 year monthly averages. USD/JPY is not only overbought but current levels are off kilter to DXY and JPY cross pairs. USD/JPY’s positive correlation exist to CAD/JPY at +64% and CHF/JPY at +90% and negative to EUR/JPY -51%, AUD/JPY and NZD/JPY.


USD/JPY at 115.00’s sits comfortably between the 2 year yield at 0.734 from 0.3376 to 0.8871 and 10 year at 1.51 from 1.4564 to 1.8095.


Currency Market Big Picture
Currency markets this week are driven by the majors as EUR/USD, GBP, AUD and NZD/USD Vs USD/CAD and USD/CHF. Cross pairs contain tiny ranges and correlation problems to offer little to no assistance to big moves. Overall currency markets lack uniformity as highlighted by the mathematical certainty of correlations. Best trades this week are found in JPY cross pairs, GBP and AUD and the same situation as last week.


USD/JPY weekly Trade


Targets for the past 2 weeks achieved destinations however shorts not only failed but USD/JPY downside was severely limited. From monthly averages, USD/JPY contains every ability to trade to more overbought and tops at 116.22 and 116.42, particularly as EUR/USD trades just ahead of vital resistance and DXY at 95.00 lows.

USD/JPY ‘s overall position is truly horrible yet required is a downside move to re correlate to DXY.


Shorts this week are located at 115.45 and 115.53 to target 114.20 on a break at 114.79. Any price over 115.45 is free money to shorts. Overall, week 8 to weekly USD/JPY trades and +900 ish pips for 7 trades.


EUR/USD and Cross Pairs


EUR/USD’s longer dated averages remain deeply oversold and moving higher and targets are now located at 1.1420 and 1.1433. EUR/USD most vital breaks are located at 1.1446 and 1.1511 at the 5 year average. EUR/USD 1.1511 coincides to DXY at 95.06. The EUR/USD strategy moving forward is long drops and the same strategy that began when EUR/USD traded to 1.1100 lows.

        GBP/USD

Vital levels this week are found at 1.3166, 1.3359, 1.3443 and 1.3496. Next above is located at 1.3552. GBP/JPY is not only overbought but multi year tops are here at 157.00’s. GBP/NZD is the preferred trade Vs EUR/NZD and EUR/AUD Vs GBP/AUD.


AUD/USD


This week lineup is located at 0.7260, 0.7273 and 0.7304. AUD/JPY begins the week deeply overbought and oversold AUD/CAD.


NZD/USD


Most vital this week for NZD is found at 0.6841, 0.6854 and 0.6891. NZD/JPY begins the week overbought and deeply oversold NZD/CAD.


Overall, a fairly average currency market week.

Brian Twomey

Wells Fargo: Currency and Interest Rate Forecasts

Currency Forecasts
Current rate Q4-2021 Q1-2022 Q2-2022 Q3-2022 Q4-2022 Q1-2023
EUR/USD 1.1291 1.1300 1.1100 1.0900 1.0700 1.0600 1.0500
USD/JPY 113.39 114.00 115.00 117.00 119.00 121.00 123.00
GBP/USD 1.3268 1.3300 1.3100 1.2900 1.2700 1.2600 1.2500
USD/CHF 0.9216 0.9200 0.9375 0.9575 0.9775 0.9900 1.0000
USD/CAD 1.2844 1.2800 1.2900 1.3000 1.3100 1.3200 1.3200
AUD/USD 0.7139 0.7100 0.7000 0.6800 0.6700 0.6600 0.6500
NZD/USD 0.6745 0.6700 0.6600 0.6500 0.6400 0.6300 0.6300
USD/NOK 9.0239 9.0275 9.1000 9.1750 9.2525 9.2450 9.2375
USD/SEK 9.1090 9.1150 9.2350 9.3575 9.4850 9.5275 9.5725
USD/CNY 6.3743 6.3800 6.4000 6.4200 6.4400 6.4500 6.4600
USD/CNH 6.3870 6.3800 6.4000 6.4200 6.4400 6.4500 6.4600
USD/IDR 14368 14400 14600 14800 15000 15200 15400
USD/INR 76.09 76.25 76.50 76.75 77.00 77.25 77.50
USD/KRW 1181.00 1190.00 1200.00 1210.00 1220.00 1230.00 1240.00
USD/PHP 50.03 50.25 50.50 50.75 51.00 51.25 51.50
USD/SGD 1.3659 1.3700 1.3800 1.3900 1.4000 1.4100 1.4200
USD/TWD 27.77 28.00 28.25 28.25 28.50 28.50 28.75
USD/THB 33.35 33.50 33.75 34.00 34.25 34.50 34.75
USD/BRL 5.6827 5.7000 5.8000 5.9000 6.0000 6.1000 6.2000
USD/CLP 846.11 870.00 890.00 900.00 910.00 920.00 930.00
USD/MXN 20.7282 21.0000 21.5000 21.7500 22.0000 22.2500 22.5000
USD/COP 4010 4050 4100 4200 4300 4400 4500
USD/ARS 101.9462 102.0000 105.0000 108.0000 111.0000 114.0000 117.0000
USD/PEN 4.0374 4.0500 4.0800 4.1100 4.1300 4.1500 4.1700
USD/CZK 22.32 22.50 23.25 23.50 24.25 24.50 25.00
USD/HUF 325.12 327.50 337.75 348.50 359.75 368.00 376.25
USD/PLN 4.1065 4.1150 4.2350 4.3575 4.4850 4.5750 4.6675
USD/RUB 74.16 75.00 76.00 77.00 78.00 79.00 80.00
USD/ILS 3.1322 3.1500 3.2000 3.2200 3.2400 3.2500 3.2500
USD/ZAR 15.8437 16.0000 16.5000 16.7500 17.0000 17.2500 17.5000
USD/TRY 16.4861 17.0000 18.0000 19.0000 20.0000 21.0000 22.0000
EUR/JPY 128.03 128.75 127.75 127.50 127.25 128.25 129.25
EUR/GBP 0.8510 0.8500 0.8475 0.8450 0.8425 0.8425 0.8400
EUR/CHF 1.0406 1.0400 1.0400 1.0450 1.0450 1.0500 1.0500
EUR/NOK 10.1893 10.2000 10.1000 10.0000 9.9000 9.8000 9.7000
EUR/SEK 10.2855 10.3000 10.2500 10.2000 10.1500 10.1000 10.0500
EUR/CZK 25.20 25.50 25.75 25.75 26.00 26.00 26.25
EUR/HUF 367.11 370.00 375.00 380.00 385.00 390.00 395.00
EUR/PLN 4.6369 4.6500 4.7000 4.7500 4.8000 4.8500 4.9000

Central Bank Outlook Interest Rates

Fed
Current: 0.125% 3M 6M 12M
Wells Fargo 0-0.25% 0-0.25% 0.50%-0.75%
Market Implied 0.19% 0.39% 0.75%

ECB
Current: -0.50% 3M 6M 12M
Wells Fargo -0.50% -0.50% -0.50%
Market Implied -0.49% -0.49% -0.43%

BOJ
Current: -0.10% 3M 6M 12M
Wells Fargo -0.10% -0.10% -0.10%
Market Implied -0.05% -0.05% -0.05%

BOE
Current: 0.25% 3M 6M 12M
Wells Fargo 0.25% 0.50% 0.75%
Market Implied 0.52% 0.82% 1.13%

SNB
Current: -0.75% 3M 6M 12M
Wells Fargo -0.75% -0.75% -0.75%
Market Implied -0.70% -0.67% -0.56%

Canada
Current: 0.25% 3M 6M 12M
Wells Fargo 0.25% 0.50% 1.00%
Market Implied 0.58% 0.97% 1.49%

RBA
Current: 0.10% 3M 6M 12M
Wells Fargo 0.10% 0.10% 0.10%
Market Implied 0.41% 0.42% 0.99%

RBNZ
Current: 0.75% 3M 6M 12M
Wells Fargo 1.00% 1.50% 2.00%
Market Implied 1.10% 1.69% 2.27%

SEK
Current: 0.00% 3M 6M 12M
Wells Fargo 0.00% 0.00% 0.00%
Market Implied 0.13% 0.18% 0.30%

NOK
Current: 0.50% 3M 6M 12M
Wells Fargo 0.75% 1.00% 1.25%
Market Implied 0.70% 0.87% 1.25%

MXN
Current: 5.50% 3M 6M 12M
Wells Fargo 5.75% 6.25% 7.00%
Market Implied 5.97% 6.78% 7.38%

BRL
Current: 9.25% 3M 6M 12M
Wells Fargo 10.75% 11.75% 11.25%
Market Implied 11.64% 12.44% 13.57%

Brian Twomey

Currency Pair Correlations and EUR/USD Averages

As highlighted yesterday to EUR/NZD correlations to EUR/USD at +42% and +10% to NZD/USD, GBP/NZD begins the year in a far worse situation than EUR/NZD..


GBP/NZD correlations to GBP/USD runs minus 25% and minus 62% to NZD/USD. To re correlate correctly to either GBP/USD or NZD/USD, GBP/NZD must move significantly. Normally a break of a significant average would force GBP/NZD to re marry correctly to correlations.


GBP/NZD’s place in currency markets is the number 1 mover to wide, wide ranges followed by GBP/JPY while number 3 is not to be found. GBP/AUD, GBP/CHF and EUR/NZD were next as big movers but all were reduced to nothing in the new modern day currency markets.


GBP/AUD remains a problem to the GBP universe at – 17% correlations to GBP/USD and negative 32% to NZD/USD. GBPCAD is holding at +38% to GBP/USD.
Positive, negative and problem correlations are found within moving averages. Here’s GBP/AUD averages from 5 to 253 day


5 day = 1.8577, 10 day = 1.8573, 20 day = 1.8560, 50 day = 1.8554, 100 day = 1.8536, 200 day =1.8610 and 1.8511 at the 253 day average. GBP/AUD is not a trade able currency.


The AUD/USD universe is correct except for AUD/NZD running at -23% correlations to AUD/USD and +47 to AUD/CAD. AUD/NZD is the opposite pair to AUD/CAD.
NZD/USD also runs correct at +90% to the NZD universe.


EUR/GBP is a further conundrum to the EUR cross pair line up as correlations run +86% to EUR/USD and +73% to GBP/USD. EUR/GBP was never worth a trade effort particularly in today’s currency markets.


USD/JPY vs USD/CAD is correct at +93% and -96% to EUR/USD but not correct to USD/CHF at +23%.
EUR?USD 2005, 2014, last week and today.
EUR/USD pre 2016 interest rate changes is highlighted below by averages pre and post 2016 and from the period September to December.


2005
5 day = 1.1851
10 day = 1.1911
20 = 1.1876
50 = 1.1797


100 = 1.1917
200 = 1.2058
253 = 1.2195
Averages spread 398 pips.


2016


5 day = 1.0460
10 day = 1.0439
20 = 1.0480
50 = 1.0591


100 = 1.0836
200 = 1.1002
253 = 1.1064
Average spread 625 pips.


Last week


5 day = 1.1299
10 day = 1.1303
20 day = 1.1296
50 day = 1.1338


100 day = 1.1489
200 day = 1.1672
253 day = 1.1763
Average spread 467.


Today


5 day = 1.1314
10 day = 1.1306
20 day = 1.1303
50 day = 1.1311


100 day = 1.1464
200 day = 1.1645..
253 day = 1.1748


Average spread 445 pips and a 22 pip drop from last week. The difference today to average spreads is pre 2016 employed a far different set of interest rates as noted by much greater daily and weekly movements from today to 400 pips. The 400 pips will eventually contract for 2022 for an additional slowdown to daily and weekly moves. Where containment is seen is the 5 to 20 and 50 day average spreads as prices enter 50 and 100 pip spreads.

Brian Twomey

EUR/USD, GBP/USD, USD/JPY, AUD, NZD and Cross Pairs

Currency markets this week are driven by middle currencies GBP/USD, AUD/USD and associated cross pairs while top and bottom currency pairs EUR/USD and NZD/USD remained trapped in tiny ranges.


GBP/USD began the week above vital 1.3357 followed by Sunday’s reported levels at 1.3357, 1.3441 and 1.3459. While GBP/USD appears to have broken 1.3459 to trade higher, the average at 1.3459 traveled higher as GBP/USD rose. GBP/USD this week was caught in a trap however higher price vs higher averages warns to eventual drop as GBP/USD must correct lower.


The GBP/USD line up remains as 1.3165, 1.3357, 1.3442 and 1.3484. The level at 1.3459 traveled 25 pips higher and GBP/USD eventually broke to trade 1.3503. Shorts remain as current GBP/USD targets a break at 1.3442 to then 1.3407 then 1.3368.
GBP/USD main price driver is 1.3357 as GBP/USD is far to low in the vicinity of 1.3357. GBP/USD this week traded 115 pips.


GBP/JPY against an +85% correlation to GBP/USD naturally traveled 229 pips higher. GBP/JPY at 155.00’s sits massive overbought and just below a multi year range top; at 157.00’s. GBP/JPY is the lead driver to GBP/USD lower. GBP/JPY overall began the current upmove from 148.00 and traded 700 pips higher. Miles of downside exist yet to trade.


AUD/USD


AUD/USD traded as GBP/USD. AS AUD/USD traded higher then averages at 0.7255 and 0.7260 rose to eventually stop AUD/USD’s climb. Vital breaks for higher are now located at 0.7260, 0.7268 and 0.7307. AUD/USD targets mid to lower 0.7100’s. The main driver to a lower AUD/USD is deeply overbought AUD/JPY.


USD/JPY short at 114.72 traded to 115.21, off 40 pips from entry and a Christmas gift to free money. USD/JPY began the week overbought and offered an extra 40 pips to downside profits. Longer term, USD/JPY is overbought from 101.00, 109.00, 110.00’s, 112.00 and 113.00’s. USD/JPY is overbought across the board.


DXY traded not only weekly lows to 95.77 but a break at 95.25 then USD travels lower on a deep slide and assists to USD/JPY’s 110 target.


EUR/USD and Cross Pairs


EUR/USD’s range and neutrality problem is located in a deeply oversold EUR/CHF, overbought EUR/JPY and dead ranges to EUR/CAD, EUR/AUD and EUR/NZD.
EUR/NZD contains a correlation dilemma to EUR/USD at +42% and +10% to NZD/USD. EUR/NZD higher is prevented by NZD/USD at 0.6841, 0.6854 and 0.6890.

EUR/USD is free to travel higher to target now 1.1418 and 1.1435 however the correlations to EUR/NZD prevents cross pair assistance particularly EUR/NZD and EUR/JPY.


EUR/NZD’s buy drop strategy targets 1.6520 then 1.6637 and just head of big break lines at 1.6760 and 1.6772.


Despite an 84% correlation to EUR/USD, EUR/CAD to move higher must break 1.4531, 1.4557, 1.4693, 1.4722 then 1.4800’s. EUR/CAD offers no assistance to a higher EUR/USD.


EUR/AUD is trapped between 1.5475 to 1.5733, 1.5749 and 1.5787. The positive to EUR/AUD and long drop strategy is correlations to EUR/USD at +81% and +67% to AUD/USD. Long term, nothing exciting exists to EUR/AUD except to range trade.
The true insight to EUR/AUD is richter scale overbought to AUD/EUR and overbought is enough to assist to lower AUD/USD.


USD/JPY Cross Pairs and Correlations


JPY cross pairs remain deeply overbought to include CHF/JPY. For CHF/JPY is massive overbought from every average dating to 1999, overbought to 5, 10 and 14 year averages, overbought to shorter averages from 5 to 253 day.


CHF/JPY correlates to USD/JPY at 97% and is the best assist to a lower USD/JPY. Great long term short.


USD/JPY negatively correlates to EUR/JPY -69%, AUD/JPY +17%, NZD/JPY -19% and +43% to CAD/JPY.


Next week’s trade and lazer focus is GBP as the best category to offer best trades and most profits.

Brian Twomey

Monthly Average Yields: 2, 5, 10, 20 and 30

Yields as 2, 5, 10 and 30 year monthly averages trade below 5 year month averages as follows: 1.3025, 1.5744, 1.9150 and the 30 year at 2.4335.


The 20 year yield from current 1.9350 trades below the 30 year at 1.904. While the shape of the yield curve correctly points straight up from 2 to the 10 year, the long end contains problems at the 30 year and 20 against a downslope curve. The short end of a yield curve from 2 to 10 year is reserved for trading interest rates, money market funds, stocks indices, currencies and market instruments, the long end is a commentary to overall economics and health of an economy.


2 Year Yield


The 2 year yield from current 0.748 trades between the 2 and 3 year monthly averages from 0.3376 to 0.8871 or 54 points and a mid point at 0.6123. Above 0.8871 targets the range from 0.8871 to 1.2865, a 39 point range and mid point at 1.0868. Below 0.8871 targets a 10 point range from 0.3376 to 0.2357.


Monthly averages for the 2 year are uniform and ends at the 1.3025 5 year average. Targets are located from 0.2567, 0.3778, 0.3785 and 0.7194.


Fed Funds Rate vs 2 Year Yield


Monthly averages for the Fed Funds rate trades at the 1 year monthly at 0.0816 to 0.2291 then 0.8725 at the 3 year monthly average. Fed Funds monthly averages from the 6 year to the 15 year trade from 0.9743 highs to 0.54 lows and much in between. Neither the 2 year yield nor Fed funds are oversold nor overbought as both exist in trade ranges.


5 Year Yield


The 5 year yield from current 1.245 trades a 40 point range between the 3 and 4 year monthly averages from 1.0870 to 1.4927 and a mid point at 1.2898. Below 1.0870 targets 0.8146 and above 1.4927 targets an 8 point range from 1.4927 to the 5 year monthly average at 1.5744.


10 Year Yield


The 10 year yield trades a 35 point range between the 3 and 4 year monthly averages from 1.4564 to 1.8095. As written in September, the 10 year at 1.57 traded a 38 point range from 1.2290 to 1.6146.


The 5 year monthly average in September was located at 1.9321 and 1.9150 today. While the topside at the 5 year dropped, bottom averages rose. In October from 1.51, a break at 1.6146 targeted a 25 point range from 1.6146 to 1.8696. Lower targeted 1.6146 to 1.2290. Topside averages dropped significantly in 2 months while bottom side averages rose to lead to an eventual showdown.


Below 1.4564, the 10 year range trades a 5 point parameter from 1.4564 to 1.4045 then a significant drop to the next average at 1.1545. Above 1.4564 then the range becomes 1.4564 to 1.8095 and a mid point at 1.6329.


10 vs 2 Spread, Fed Funds and Correlations


From the 10 year mid point at 1.6329 to the 2 year from 0.6123 then the 10 and 2 spreads 1.1226 and 0.89 from averages 1.4564 and 0.3376.


The 10 year vs 2 at the 2 year monthly average correlates +48% and +86% at the 3 year average.
Fed Funds at the 1 year monthly averages vs the 2 year correlates +0.01%, the 2 year average at +86 and +97% for the 3 year.


The corresponding 10 year vs Fed Fund at the 1 year average correlates -71%, +39 at the 2 year and +81% at the 3 year average.


20 Year Yield


Best monthly averages are located from 1.7080 to 1.9451.


30 Year Yield and 10 Year Correlations


From current 1.905, the 30 year yield trades from the 2 year monthly average at 1.7987 to the 1 year average at 2.0261 then the 3 year at 2.0581 and 2.3126.


While the 30 and 10 year monthly averages correlate at the 1, 2 and 3 year at +83%, +96% and +98%, the 30 year should trade a minimum of 2.05 and a range from 2.05 to 2.52 at the top end. Problem to 2.52 along the price path is the 4 year at 2.3126 and 5 year at 2.4335.


Fed Funds vs the 30 year correlates -73% at the 1 year, +30% at the 2 year and +77% at the 3 year. While the 30 year offers no assistance to Fed Funds insights, the 30 also offers no help to trade financial instruments.

Brian Twomey

ECU European Currency Unit

What was the european currency unit?
 
The european currency unit, ECU for short, was an artificial “basket” currency that was used by the member states of the European Union (EU) as their internal accounting unit. The ECU was conceived on 13th March 1979 by the European Economic Community (EEC), the predecessor of the European Union, as a unit of account for the currency area called the European Monetary System (EMS). The ECU was also the precursor of the new single European currency, the euro, which was introduced on January 1, 1999.
The acronym ECU is considered a word and in French is the name of ancient French coin. The ISO-4217 symbol for the ECU was “XEU”.
 
How was the ECU linked to the European Monetary System?
 
The EMS was a limited-flexible exchange rate system that defined bands in which the bilateral exchange rates of the member countries could fluctuate. The bands of fluctuation were characterized by a set of adjustable bilateral central parities and margins that defined the bandwidth of permissible fluctuations. This set of parities was called a parity grid as it defined parities for all combinations of the ECU constituent currencies. The borders of the fluctuation bands were described by the upper intervention point and lower intervention point. Typically, the bandwidths were 2.25% to each side, with a wider margin for the Italian Lira. After a currency crisis in 1993, the bands were widened to 15% on each side, but in practice the fluctuations were kept within a narrow band. When a market exchange rate reached either of these intervention points, the central banks were compelled to support these rates indefinitely through open market operations (buying of weakened currency or selling of a strengthened currency). Some countries (notably Britain) initially did not participate in the exchange rate mechanism of the EMS. Britain participated actively in the EMS only for a short period.
 
What is the value of an ECU?
 
When the euro was introduced in January 1999, it replaced the ECU at par (that is, at a 1:1 ratio).
The tables on the right shows the composition of the ECU basket as it evolved over time through the expansion of the European Union. Note that the compostion values in the table below are fixed, while the weights fluctuate due to changes in the bilateral exchange rates.
 
How can one calculate the value of an ECU?
 
To calculate the value of the ECU (XEU) with respect to another currency (say, USD), divide each of the twelve amounts of national currency in the ECU basket (see table above) by the corresponding exchange rates of that country vis-à-vis the target currency (DEM/USD, FRF/USD, GBP/USD, etc.). Then add these twelve numbers together to obtain the USD/XEU exchange rate.
 
The tables below show the composition of the ECU basket at different times during the existence of the ECU.
 
13-Mar-1979 through 16-Sep-1984
ISOCurrencyValueWeight (%)
 BEF  Belgian Francs  3.80  9.64 
 DEM  German Marks  0.828  32.98 
 DKK  Danish Krones  0.217  3.06 
 FRF  French Francs  1.15  19.83 
 GBP  British Pounds  0.0885  13.34 
 IEP  Irish Punts  0.00759  1.15 
 ITL  Italian Lira  109  9.49 
 LUF  Luxembourg Francs  (*)  (*) 
 NLG  Dutch Guilders  0.286  10.51 
Technical Notes: The Belgian and Luxembourg francs were in a currency union. Thus, the ecu basket values are combined and shown only for Belgium. Weights are evaluated at central parities on March 13, 1979.
 
17-Sep-1984 through 21-Sep-1989
ISOCurrencyValueWeight (%)
 BEF  Belgian Francs  3.85  8.57 
 DEM  German Marks  0.719  32.08 
 DKK  Danish Krones  0.219  2.69 
 FRF  French Francs  1.31  19.06 
 GBP  British Pounds  0.0878  14.98 
 GRD  Greek Drachmas  1.15  1.31 
 IEP  Irish Punts  0.00871  1.20 
 ITL  Italian Lira  140  9.98 
 LUF  Luxembourg Francs  (*)  (*) 
 NLG  Dutch Guilders  0.256  10.13 
Technical Notes: The Belgian and Luxembourg francs were in a currency union. Thus, the ecu basket values are combined and shown only for Belgium. Weights are evaluated at central parities on September 17, 1984.
 
21-Sep-1989 through 31-Dec-1999
ISOCurrencyValueWeight (%)
 BEF  Belgian Francs  3.301  8.183 
 DEM  German Marks  0.6242  31.915 
 DKK  Danish Krones  0.1976  2.653 
 ESP  Spanish Peseta  6.885  4.138 
 FRF  French Francs  1.332  20.306 
 GBP  British Pounds  0.08784  12.452 
 GRD  Greek Drachmas  1.44  0.437 
 IEP  Irish Punts  0.008552  1.086 
 ITL  Italian Lira  151.8  7.840 
 LUF  Luxembourg Francs  0.13  0.322 
 NLG  Dutch Guilders  0.2198  9.87 
 PTE  Portugese Escudos  1.393  0.695 
Technical Notes: During the period May 3, 1998 through December 31, 1998, the rates of the 9 currencies that are part of the ECU basket as well as euro-11 member currencies were irrevocably fixed. Weights are evaluated at the prevailing exchange rates on December 31, 1998.
 

Brian Twomey

EUR/USD, NZD/USD, AUD/USD, ECU and XEU

Since NZD/USD broke below its 5 year average at 0.6843 in November, lows achieved 0.6702 or 141 pips then rose 138 pips to 0.6840 highs. NZD/USD at current 0.6809 is right back where it began in November.


NZD/USD higher must break 0.6841 , 0.6856 and 0.6888. The target below is located at 0.6503 and the same reported target written in November. Problem with the 0.6503 target is higher averages above 0.6841 target 0.6769 and 0.6742. NZD/USD has every ability to achieve 0.6503 but higher averages must follow and currently averages are rising and the same situation for EUR/USD and AUD/USD.


Rather than oversold or overbought, NZD/USD just exists doing nothing. Most vital however as NZD/USD represents the bottom currency and signal pair, a break above 0.6841, 0.6856 and 0.6888 then the target at 0.6503 is nullified as higher targets become 0.6911, 0.6979 and 0.7053.


As bottom currency and signal pair, NZD/USD break above 0.6841, 0.6856 and 0.6888 cancels a lower EUR/USD and AUD/USD as the rear guard forces EUR/USD and AUD/USD higher.


NZD/CHF and correlations to NZD/USD is a further prevention for an NZD/USD drop as NZD/CHF at current 0.6256 is oversold and any further drops then NZD/CHF achieves the richter scale to oversold.


EUR/USD


EUR/USD’s target at current 1.1049 is derived from its 5 year average now at 1.1508 and rising. Longer dated averages in the 1.1500’s and rising are deeply oversod and prevents a significant EUR/USD drop. EUR/USD big break is located at 1.1451 and an average neither rising or falling over many weeks. Above 1.1451, contends with 1.1.508, 11568 and 1.1573.


EUR/USD Seasonals


EUR/USD not only enters its seasonal downtrend, January is a huge EUR month. Dating to 1995, EUR/USD records 15 down months for January and 8 up months. For 2019 ended the month with a Doji candle.


XEU and ECU Exchange Rates


A quick aside to prior 1998 exchange rates. USD/DEM as the German currency ruled Europe as the EUR/USD performs its tasks today. USD/DEM was separated from the European XEU basket then factored using ECU exchange rates to transfer the proper exchange rate number from USD/DEM to EUR/USD.


Any students of the markets remaining today and dying to see XEU and ECU calculations and how it was all factored, see FXstreet and my blog btwomey.com for deep details as I performed and showed the necessary calculations. The same principle holds from 2012 when Greece threatened to leave the European Union and the Greek Drachma was repriced as EUR/GRD at 312.00.


EUR/USD and Ranges


For interested, on my blog is a range comparison from MA’s 5 to 253 days then from 5, 10 and 14 year averages. Compared with averages from 2005 to 2021 are targets for every average. Since 2005, EUR/USD ranges dropped by slightly more than 1/2.


AUD/USD


AUD/USD’s big break is located at 0.7255, 0.7259, 0.7304 at the 5 year average and 0.7368. The target at current 0.6896 for the most part achieved target at low 0.6900;s then AUD/USD rose to current 0.7200’s. Similar to NZD/USD, AUD/USD dropped 400 pips then rose 300 .

Similar to EUR/USD, longer dated averages are massively oversold to force AUD/USD higher and a long only strategy much like EUR/USD and NZD/USD.
To achieve again the target at 0.6896 will take time as 0.7255 won’t allow 0.6896 to trade without becoming richter scale oversold.

Brian Twomey

EUR/USD 2005 Vs 2021

Below is EUR/USD 5 to 253 day averages during the period 2005-09-05 to 2005-12-26. EUR/USD on December 26 was 1.1859.

— Day Averages —
 # Trading DaysMean AvgStd DevZ-ScoreZ-Target
5 Day31.18510.00210.38101.1872
10 Day61.19110.0063-0.82541.1848
20 Day151.18760.0097-0.17531.1779
50 Day351.17970.01000.62001.1897
100 Day701.19170.0150-0.38671.1767
200 Day1421.20580.0207-0.96141.1851
253 Day1801.21950.0343-0.97961.1852

Vs EUR/USD today in the period September to December 2021. EUR/USD today trades from the close at 1.1315.

— Day Averages —
 # Trading DaysMean AvgStd DevZ-ScoreZ-Target
5 Day51.12990.00151.06671.1314
10 Day91.13030.00230.52171.1326
20 Day151.12960.00230.82611.1319
50 Day361.13380.0095-0.24211.1243
100 Day731.14890.0171-1.01751.1318
200 Day1451.16720.0236-1.51271.1436
253 Day1821.17630.0279-1.60571.1484

Notice 5, 10, 20 day averages died today Vs 2005. All averages died 2005 vs today.

5, 10 and 14 Year averages in 2005

Year Average –
# Years# Trading DaysMean AvgStd DevZ-ScoreZ-TargetStd ErrErr Z-ScoreErr Z-Target
512791.09230.15390.60821.24620.004321.76741.0966
1017901.06470.14440.83931.20910.003435.64711.0681
1417901.06470.14440.83931.20910.003435.64711.0681

Vs 5, 10 and 14 Year Averages today 2021

Year Average –
# Years# Trading DaysMean AvgStd DevZ-ScoreZ-TargetStd ErrErr Z-ScoreErr Z-Target
512791.15080.0459-0.42051.10490.0013-14.84621.1495
1025581.19150.0919-0.65071.09960.0018-33.22221.1897
1435851.25010.1300-0.91081.12010.0022-53.81821.2479