FX Weekly: BOJ, JGB’s, 5 Year Averages, 14 Currencies Levels and Targets

The BOJ intervened twice by purchase Yen at 9 trillion or 57 billion USD. The intervention was considered the highest ever operation in a single week. The BOJ spent 9188.1 billon or 6 billion USD for 2 intervention operations in 2022.

The 400 pip drop for the 2022 intervention held as BOJ interest rates supported the lower USD/JPY price while the recent intervention resulted in failure as USD/JPY lacked the proper lower interest rate level to sustain a USD/JPY fall.

Interest rates must view in terms of JGB’s as supporters of interest rates, USD/JPY and the JGB market. At the end of 2023, foreigners held 66% of T Bills, 29% banks and 2.7% for the BOJ. Combined T Bills and JGB’s, the BOJ holds 47%, Banks 13.1%, foreigners 13.5% and 15% to Life Insurance companies.

10 year JGB Futures trading volume, yields and volatility is at the highest levels dating to 2013. Regional banks dominate in JGB transactions at all maturity levels while City Banks monopolize the T Bill market.

While bond traders and Exporters enjoy a profitable free money field day, Japanese households suffer under a weak Yen. Ueda Man offered no relief to households by the recent BOJ raise but instead assisted bond traders.

YCC’s January adjustment, elimination and Ueda Man’s raise offered a continuation to a perfect upslope in the JGB yield curve both from a Spot Yield and Compound yield basis from 1 to 40 year maturities.

The most vital mid point at the 10 year bottomed at 0.54 in December / January and traded to 0.93 in April. The 10 year traded 40 points higher in 4 of the past 5 months.

While interest rates traded the required 10 points since the BOJ raise and 40 points to the 10 year, a 2 tier system of money market trading was created by trades in either JGB’s or interest rates and at various maturities.

The BOJ and Japan’s money masters view the tier system as an elimination to form 1 big long yield curve instead of a separate interest and JGB curve.

The danger to the extraordinary and unusual money market developments is yields trade higher or spiral out of control by the vulnerability of Asia, China/ Taiwan, economics, natural disasters, wars and missiles fired in Asia or Tokyo. Investors will short JGB’s faster than a lightening strike and USD/JPY drops like a rock.

Created by the new yield curve arrangements was masses upon masses of supports to USD/JPY to the point USD/JPY becomes a permanent weak currency and no shorts exist.

5 Year Averages

Currency, financial market prices and economics to Inflation and GDP trade within the context of 5 year averages. Currencies trade within 2 and 400 pips on either side of the 5 year average. The 10 year yield trades 2 points above, SPX trades 1000 points, 600 points for XAU/USD.

NFP trades 12,000 jobs just above the 5 year average at 163.000 from 175,000. GDP trades 3.04 at the 2 year average and 3.38 for Inflation at the 2 year average.

Correlations across all currencies and other financial market instruments trade within 50% and 60%. All markets trade extremely tight in compressed ranges due to low correlations. Required is normal market correlations at 80% and 90% to create wider trade ranges. This may require price breaks at 5 year averages.

Above 5 Year averages: XAU/USD, DXY, M1, M2, USD/JPY, 10 year yield, SPX 500, NFP, Fed Funds, Cocoa, JPY cross pairs, EUR/CAD, GBP/CAD, EUR/NZD, GBP/NZD, AUD/NZD, USD/CAD, EUR/AUD, GBP/AUD, EUR/GBP, CHF/JPY.

Below 5 year averages: Inflation, GDP, EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/CHF, CHF Cross pairs, AUD/CAD, NZD/CAD.

Week

EUR/USD big levels and overbought at 1.0813, 1.0833 and giant level at 1.0868. Short at 1.0800’s is the only trade for best profits. Bottoms are located at 1.0765 and 1.0725.
AUD/USD 0.6552 Vs 0.6733. No changes in months. Short is the way this week.

DXY 104.66 is upon us. DXY trades 104.66 to 106.50. Bottoms trade this week at 104.95 and 104.72.

GBP/USD Big breaks and shorts at 1.2541, 1.2563, 1.2586. Bottom at 1.2464.

USD/JPY targets 154.99 and 193.67 for GBP/JPY, EUR/JPY 166.11.

Wide rangers trade oversold as EUR/NZD, GBP/NZD, GBP/AUD, EUR/AUD. GBP/AUD targets 1.9044 easily and 1.6389 EUR/AUD.

GBP/NZD higher must break 2.0856 and 1.7904 EUR/NZD.

EUR/CAD and GBP/CAD trade above 5 year averages while AUD/CAD and NZD/CAD trade below. This situation can’t hold as all must trade on one side of the 5 year.

EUR/CHF and GBP/CHF trade above 5 year averages while AUD/CHF, NZD/CHF and CAD/CHF trade below. USD/CHF trades below.

Overall markets are trading in bad form under low correlations, short ranges, compressed averages and warrants a stronger move to breakout.

Brian Twomey

USD/JPY Intervention

The Japanese government has intervened twice this week to buy yen, totaling just under 9 trillion yen ⇒ Possibly the highest ever in a single week.

Above is an exact quote from our money market friends.

As my research and investigations into the BOJ become far more stronger with deeper understanding, The BOJ deserves incredibly strong focus because they don’t play a fair game as all central banks.

The 2022 intervention and 400 pip drop incorporated an interest rate decrease. This held the 400 pip drop from a quick rise to nullify the intervention.

On the last intervention, interest rates remained at the same levels. This is why USD/JPY bounced back to trade higher immediately.

The trade data is due next week so we’ll see what’s on the minds of the Japanese. I will show more to what don’t play fair means in relation to most vital trade data.

Most vital to the Japanese is trade and interest rates. But to obtain this data is extraordinarily difficult because interest rates are offered only by daily rates and trade data takes hours to retrieve.

Most vital central bank data is extraordinarily difficult to obtain but its required data to fully understand what the central bank is doing.

Weak USD/JPY is in the Japanese National Interest. Also a direct quote.

Brian Twomey

SPX Vs 10 Year Yield

Y = 10 Year yield, X = SPX 500

5 year averages. SPX = 3957.27 Vs 10 year = 2.417

Correlations 1 to 5 years. -11%, +51%, +6%, +51%, +59%.

Both SPX and the 10 year yield is overbought.

Bloomberg guy last week. We exit SPX to 10 year yield. What was he saying to us on Bloomberg. Don’t know exactly and why the mention.

SPX and 10 year at highest 50% is the commonality among all financial instruments. SPX and the 10 year yield are the exact same instruments and should correlate at +80% and +90%.

At 50% says averages are off which translates to problems to current market prices and an underperforming market price. Could mean only SPX or the 10 year or could be both. I see it as both due to GDP at 1% and Inflation at 3%.

A yield is as much an economic release at GDP and Inflation and lopsided. But its also an interest rate.

Fed Funds 5.33

Inflation 3.1%

GDP 1.6.

Powell did this to himself and to us by the result of the underperformance of the market price, decreased ranges and decrease trade opportunity for profit.

SPX traded 30 points today, 35 points yesterday, 26 Wednesday.

10 year = 0.06, 0.07, 0.04 Wednesday.

See how averages are off, correlations are off, market price isn’t trading jack squat. Nor is GDP and Inflation moving. The problem is as much an MA problem and Economics.

Brian Twomey

Consumption

Imagine the honor to appear on Bloomberg and CNBC. The glorious time to shine and show your skills, knowledge and market acumen. I spent 5 days taking notes and was stunned by what I saw from Portfolio managers and whatever else they call themselves.

Consumption

What is Consumption. Its not 1, 2 or 3 releases. Its the relationship to supply and demand glued together by Sales.

As a release, imparts nothing especially to 1 or 3 releases. Speculation to 1 or 3 releases, Elliott wave these people good bye and their faulty charts

central banks maintain national accounts and this is where vital data is found. Now all found multi year consumption.

consumption = 60% ish of GDP. Rising GDP must meet minimum 60%.

GDP Failure seen by oil at 40% to Inflation

data = Index to index under tiny moves

what central banks data show by headline is deception and misdirect on purpose. All fall for this hook, line and sinker. All are wrong.

Fed National Accounts

Quarterly releases, 200 pages. See why data isn’t seen.

Financial Accounts Matrix

Debt Growth by Sector
Borrowing by Sector
Debt Outstanding by Sector
Derivation of U.S. Net Wealth
Distribution of Gross Domestic Product
Distribution of National Income
Saving and Investment
Net Capital Transfers
Derivation of Measures of Personal Saving
Assets and Liabilities of the Personal Sector

This is just a small portion to all vital releases and data.

Bloomberg and CNBC

What is the relationship to stock indices and currencies. Depends on the exchange rate arrangements. EUR/ Other currency must equal European indices. DXY = SPX. USD/CHF = Opposite Swiss Indices. GBP = FTSE.

What did this guy say by this statement. We moved money from SPX to Yields.

Bloomberg and CNBC are the Einstein approaches to markets and trades. I will show you 1000 ways the light bulb doesn’t work.

Brian Twomey

Brian Twomey Heart Attack 2

Dear friends,

So so many thank you’s goes out to multitudes of dear friends, loyal supporters over decades. Literally multitudes. I’m honored in the highest regards

I operate for 20 years on God’s blessings and grace & its God love that pulled me out yet again.

Brian Twomey

Brian Twomey Heart Attack

Dear Friends,

I had a massive heart attack last weekend caused by a blockage. The dr inserted a stent then 5 days in a hospital bed. I’m home now yet weak and tired.

I followed markets all week by CNBC and Bloomberg.

We begin again tomorrow. Weekly trades are sent as usual Saturday morning. Day trades begin Sunday night.

Overall, no changes just time lost. We[‘ll see how views go here to determine how much to proceed or possibly stop posting.

Subscriptions are open for day and weekly trades.

Brian Twomey

Next Week

The guy I posted his links is now gone from this site and he goes down as just another of the gabillion dumb asses that sell poison. I am so sorry to repeat this over and over but these trading crowds today are dangerous and not qualified. Let me state it this way.

SPX is approaching a top. Read December 2023 and January 2024, SPX was at a top. I have and will show the details. And as stated, shorts only is the only trade. Shorts was not only the easiest trade but the profits were guaranteed. And much more downside to go. The trading crowds screamed long but this was wrong by Inflation, DXY, EUR/USD, Money Supply.

Cocoa = Highs 9206.00, lows 6900.00. Targets 6308.03, 5121.35 and caution at 4574.73. Running +2300 points.

FX for next week.

Watching long EURAUD and GBPAUD for next week. USDJPY and all JPY cross pairs sit just above crucial supports.

EURUSD 1.0752, GBPUSD 1.2541. DXY sits at 104.66. CADZAR deeply oversold

GBPCAD & EURCAD overbought GBPNZD & EURNZD oversold.

Deeply oversold CAD/ZAR. This says it all as perfect opposite to EUR/USD

Brian Twomey

FX Next Week: Commodities, 14 Currency Pair Levels and Targets

On the current random view to Commodities, Gold as XAU/USD and XAU/JPY trade deeply overbought. Cocoa trades massive overbought from the Softs. The speculation is the remainder category as USD Coffee, Orange Juice and Sugar also trade overbought alongside DXY.

The problem to downside moves for Commodities is DXY traded 105.00 to 106.00 for the past 3 weeks and 103.00 to 106.00 for the prior 4 weeks. Import and Export lines as all Commodities trades fairly neutral. DXY at 106.00’s trades dead center from the drop from 114.00’s to 99.00’s. A DXY move is required to force Commodities to trade to at least neutral from severe overbought.

Cocoa is a big mover under wide wide ranges while Gold and XAU will trade extremely slow. Most vital Commodities to the world are Oil, Wheat, Corn, Soybeans and Coffee. All are big movers and trade wide ranges. The abundance of the Wheat supply is located in Ukraine. Copper is important because Copper is Steel. Demand for Copper assumes Manufacturing and Building construction.

The currency is the primary mover to Commodity prices followed by Inflation and Interest rate changes. Seen from Commodities are great trades from overbought rather than long term trades or Super cycles however the current view is cursory. A DXY Correlation will reveal if long term trades exist. Placement of Import and Export lines will serve as backdrops to the assessments.

USD/JPY

Trades last week were assessed and offered as normal weekly trades and BOJ won’t intervene. We were short all JPY pairs. We’re trading the 3rd round of shorts. Next week trades will resume as normal weekly trades again

The program is short middle 156.OO’s to target 153.00’s. Recall last week, USD/JPY must trade to minimum 153.00’s an 152.00’s in order to normalize.

GBP/JPY next week targets 192.00’s, EUR/JPY 165.00’s. CAD/JPY low 112.00’s.

EUR/USD bottoms at 1.0717. Longs must break 1.0754 then EUR/USD hits a brick wall at 1.0835 and 1.0843. EUR/USD trades oversold and we’re long for next week.

The EUR universe trades next week as oversold to EUR/AUD and EUR/GBP Vs overbought EUR/CHF, EUR/JPY, EUR/NZD and EUR/CAD.

NZD/USD trades deeply oversold. NZD as Rear guard next week prevents drops to EUR/USD, GBP/USD and AUD/USD. NZD/USD targets the break at 0.6001 then 0.6041. The longer term target at 0.6179 is next after 0.6041 completes.

NZD cross pairs trades oversold NZD/CHF and NZD/CAD.

AUD/USD also trades deeply oversold alongside NZD/USD. AUD/USD must trade comfortably inside the range from 0.6543 to 0.6733. Long AUD/USD and NZD/USD is the only strategy available.

Oversold GBP/USD targets the break at 1.2539 then 1.2625. Easy targets for next week.
USD/CAD targets 1.3573 and 1.3437. USD/CAD easily achievable 1.3573 next week.
GBP/CAD and AUD/CAD best shorts for next week.

GBP/NZD and EUR/NZD great shorts for next week to target easily 2.1035 and 1.7964.
GBP/AUD watch 1.9219 and EUR/AUD 1.6482. EUR/AUD trades far more oversold than GBP/AUD.

Brian Twomey

WTI, Cocoa, Inflation

Commodities trade as correlations to either DXY or EUR/USD due to permanent and opposite -90% correlations from averages 1 to 10 years. XAU/USD correlates to EUR/USD at +23%, +81%, +8%, +2%, +2%.

DXY negatively correlates to XAU/USD at -15%, -66%. EUR/USD wins at correlations because EUR/USD and XAU/USD are the same exact currencies and classified as risk assets.

The speculation for Commodities is EUR/USD beats DXY to correlations across all Metals including Copper. DXY beats EUR/USD Correlations in Grains, Softs and Energy.

WTI

WTI trades 72.08 and 78.13 Vs 81.68 and 83.78. Above 83.78 targets 95.20. Below 72.08 targets the range from 72.08 to 68.18 at the 5 year average.

Inflation Vs WTI Correlations runs: +2%, +68%, +62%, +84% and +82%. Inflation Vs WTI last month ran as: -3%, +72%, +67%, +85%, +85%.

Inflation Averages short term run as : 3.5, 3.95, 4.22, 4.49, 5.48, 5.73, 4.59, 4.06. The overall big line is located at 6.00’s.

WTI trades fairly neutral as not overbought nor oversold.

Cocoa

Cocoa Vs EUR/USD runs negative Correlations across the board to averages 1 to 10 years. DXY Vs Cocoa runs positive as: +16%, -18%, +22%, +29%, +30%, +32%, +36%, +32%,.

Inflation Vs Cocoa Correlations run: -25%, -59%, -56%, -17%, -4%.

Cocoa trades massive overbought and targets 6308.03, 5121.35 and caution at 4574.73.

The 5 year average is located at 2884.20 and 10 year at 2749.70.
Only trade strategy available is shorts due to severe overbought.

Brian Twomey

DXY Imports Vs Exports Trade

Imports Vs Exports 8.6 = DXY 112.73, 113.09

4.3 = 108.43, 108.79

2.15 = 106.64, 106.28

1.07 = 105.56, 105.20

0.53 = 105.02, 104.66

Average 107.46 = 110.39, 104.52

April range = 106.52 – 103.88. This = 0.53 or 103.60, 103.96.

USD/JPY = US at 159.84, Japan = 164.39

US = 155.54, Japan 157.81

US = 153.39, Japan 154.52

US = 152.31, Japan 152.88

US = 151.77, Japan 152.06

US = 150.71, Japan 150.42

US Average 153.92 Vs Japan 155.34

April Range 160.17 – 150.80

Brian Twomey

SPX500 Vs M1

Correlations: +80%, -58%, -50%, +19%, +68%, +79%, +83%, +85%, +86%, +87%

Y = SPX X = M1

See a Trade Here. The incompetence is just extraordinary even from the banks. Everywhere we look, we find the same old disaster.

Brian Twomey

FX Weekly: BOJ Intervention, 14 Currency Levels and Targets

USD/JPY ‘s climb to current 158.00’s is the result of interest rates travel from deeply negative to current positive. The JGB yield curve from short rates just achieved the necessary and proper rates last Thursday. The massive readjustment just achieved positive and proper levels after 1 month since the Ueda Man raise. The adjustment resulted in 1000 USD/JPY pips.

Ueda Man raise because no reason existed to touch headline rates especially when central banks contemplate lower rates. But current levels supplies support to Inflation and GDP at 2%.

USD/JPY’s overall problem is DXY as DXY rose straight up from 101.00’s since January to middle 106.00’s. USD/JPY must naturally follow as DXY and USD/JPY correlations run +90% as a permanent market condition.

Consider the September 2022 intervention. USD/JPY at 152.00’s matched the DXY top at 114.00’s. No reason for Intervention as DXY was dropping and USD/JPY followed. The BOJ forgot to look at DXY.

DXY today is at a significant top and naturally the BOJ isn’t watching. The BOJ dilemma is trade vs the Japanese Consumer and Economy.

USD/JPY at 158.00’s now comes to a crossroad. BOJ trade overall is fine although for the first 10 days of April, Imports at 3613, 163 exceed Exports 2852,226 by a deficit of 760, 937. No cause to intervene.

The BOJ is abiding by correct trade rules as noted by the Treasury Semi Annual Report to Congress on Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States. Last Japan and BOJ met the manipulation list was 2020 and 2019 but not 2023 nor 2022. The next report is scheduled for May / June 2024.

The BOJ’s previous JGP purchases are in massive profits especially when YCC was lifted and the 10 year yield’s rise of 20 points. No reason to intervene.

The Japanese economy as low GDP, high Inflation and a 20 point rise in Oil since February is reason to consider intervention. The Choice is take a light hit on trade and rescue the economy or continue with positive trade and the Japanese consumer suffers further.

Durable goods dropped drastically in 2024 and now trades on a slight upswing from oversold levels.

Intervention wasn’t a smart move in 2022 and not a bright maneuver for 2024 as DXY will take down USD/JPY.

USD/JPY

Next tops are located at 158.90, 159.57, 160.25, 161.62. Overbought remains until at least 153.00’s and 152.00’s trade.

The USD/JPY and JPY cross pair strategy is short all JPY. JPY cross pairs require at least a 500 to 600 pip drop to achieve a semblance of normal.

Our weekly strategy is short USD/JPY prior to 158.90 to target 156.86. EUR/JPY targets 167.81, GBP/JPY 196.05. GBP/JPY next big line is at 198.80, EUR/JPY at 169.97.
CAD/JPY’s next big line at 116.01 and targets 114.53. AUD/JPY targets 101.25, NZD/JPY 92.47.

Weekly

EUR/USD next big break is located at 1.0750 then 1.0873 and 1.1037. The EUR universe is mixed and lacks uniformity as overbought EUR/CHF, EUR/JPY, EUR/NZD is matched by oversold EUR/AUD, EUR/CAD and EUR/GBP.

GBP/USD trades just below vital 1.2528 then 1.2625,1.2782 and 1.2808 at the 5 year average. Overbought applies to GBP/JPY, GBP/CHF, GBP/NZD and oversold GBP/AUD and GBP/CAD.

The problem anchor pair this week is overbought AUD/USD and AUD cross pairs as AUD/CHF, AUD/JPY, AUD/CAD. Better trades exist.

EUR/CAD, GBP/CAD and NZD/CAD trade oversold. USD/CAD waits on the break at 1.3630 to target middle 1.3500’s.

GDP Vs Inflation

The popular term 1 month ago across all economies was Technical Recession. The term disappeared by a 0.2 and 0.4 rise in GDP. GDP remains oversold and applies to all economies. Below are Inflation Vs GDP spreads.

The Fed now stands at 1.9 and the BOJ at 1.2. Australia at 3.4 is matched by NZD at 3.4 and 3.0 for GBP.

Brian Twomey

USD/JPY

As written a gazillions times, interest rates move currency and all market prices and began in 1972 with the free float. Central banks made the rules as they instituted all market prices and trading rules since 1972. The ECB for example began 1999 with 14 interest rates then 7 and today, only 5.

The dead traded EUR/USD today is the result of the 5 rates. But all central banks complied except the FED as Fed rates are written in mathematical stone and can’t ever change the structure. They certainty can adjust but they won’t as central banks despise any volatility.

Very few on the planet understand markets and prices and my data reveals this concept. Much, much more is on the way.

How about EUR/USD Vs DXY Correlates from +95% to +97% for averages 1 to 10 years. This tells us all we need to know as all the revolving pieces will come together.

A few pieces of data and terrific revelations remains on site as many friends, readers and followers have been here for literally decades. But the wider audience doesn’t understand, nor care and wouldn’t use nor know how to apply the information.

What drive USD/JPY last week, 90 day = +0.00097,

180 day = +0.00050 and the big Kahuna = +0.00021042.

BOJ interest rates had to travel far and wide to achieve positive from deeply negative. BOJ interest rates still have a long way to travel higher.

If I view USD/JPY from the 10 year JGB for example, the result is 159.33 and another 100 pips. The 10 year JGB remains extremely low in relation to BOJ main interest rates.

On the agenda next is SPX Vs M1. This is a test but I already know the answer. Goldman Sucks or one of these high falutin banks offered an assessment to the level of money supply = SPX longs or shorts.

See this new and ridiculous concept. The bankers believe they are kings of the road and only they know what’s going on. So they come with these new concepts that may or may not work to draw attention to themselves. Its all about views but never about correct analysis or profitable trades. But when they speak, the unsuspected trading world takes all as gospel hook, line and sinker.

Does anyone ever test these bankers. Matter of fact yes, we do and we find them full of BS.

The weekly is on the way.

Brian Twomey

Ministry of Finance Newsletter, Japan Bond Trading Company

All the charts and data, present and historic.

https://www.bb.jbts.co.jp/en/index.html

Newsletter

Click to access jgb2024_04e.pdf

Brian Twomey

FX Next Week: Inflation Vs GDP, 14 Currency levels and Targets

Current GDP at 3.4 Vs Inflation 3.5. GDP and Inflation are the exact same averages except both move in opposite directions but never by much. At the 2 year average, GDP and Inflation Correlate at -67%. The 2 year average covers the period from 2024 to 2022. The same -67% is seen from the period 2023 to 2022.

On a wider scale to cover yearly averages from 2024 to 2010, GBP and Inflation Correlate at +23%. The 14 year Inflation average is 2.62 and is matched by GDP at 2.27.
The widest distance to Inflation Vs GDP in 14 years was seen in 2022 at 6.1%. To include 6.1% then the average distance to Inflation Vs GDP is 1.52%. To exclude 6.1% then the average distance is 1.17%.

GDP is forecasted at 2% from 2024 to 2030 then the drop to 1.0%. Inflation is forecast at 2%. GDP Vs Inflation trades at dead ends and going nowhere. The Economy of the United States is going nowhere.

Then we arrive at the concept of Current dollars in relation to GDP to answer the question how much money was added or subtracted from the economy based on the GDP release. Per quarter we’re dealing with about $300 billion by a 5.1% increase in Q2023. The top rate at the 93 year average is 6.27%. Growth in GDP per dollars is a paltry high at $300 billion.

GDP data is by far the hardest information to obtain. The BEA doesn’t want the public to know. Same as BOJ interest rates and trade data. Today’s release will reveal nothing unless longer term GDP data is known. We will hear analysis upon analysis but its faulty analysis. The BEA hides the necessary data by pretty charts and graphs.

Now we have Powell, the Joe Biden of Finance. The real question for Powell is how bad will the recession hit or are we going to something much worse.

Next Week

Targets

EUR/USD 1.0734 traded highs 1.0728, AUD/USD 0.6495 completed, GBP/USD 1.2522, highs 1.2522. Perfect and complete. NZD/USD target 0.5981, highs 0.5963.
How many pips this week, 400, 500?

EUR/USD Next big break 1.0753 then 1.0800’s easily.

USD/JPY why should the BOJ intervene. USD/JPY’s problem is DXY at 106.00’s and 105.00’s as USD/JPY and DXY are the exact same currency. Trade for the BOJ is going very well.

DXY 103.66 = USD/JPY lows.

USD/JPY targets 154.20 then 153.57.

GBP/JPY targets 192.62 easily, EUR/JPY 165.02 also easily, CAD/JPY 112.55, AUD/JPY 99.93, NZD/JPY 91.60.

GBP/USD higher or lower at 1.2534. Lows are located at 1.2428 to reload long.

AUD/USD top at 0.6553. Break at 0.6507 for lower targets.

NZD/USD Bottoms at 0.5922.

CAD/ZAR 13.8894 break = DXY 103.66 and USD/JPY 154.00’s and 153.00’s.

GBP/AUD and EUR/AUD trade deeply oversold and target 1.9240 for GBP/AUD and 1.6520 or EUR/AUD.

GBP/NZD and EUR/NZD remains neutral and the same position as this week.
GBPCAD and EUR/CAD shorts for next week.

CHF cross pairs all trade deeply overbought and matches overbought USD/CHF.
Watch USD/CAD 1.3631. Overall, shorts for next week.

Brian Twomey

GDP Vs Inflation, 2023 -2010

13 years. Y = GDP. X = Inflation.

Inflation Average = 2.62. GDP Average = 2.27.

Correlation = +23%.

GDP and Inflation are the same lines and with only slight deviations between both.

2023 = Inflation 4.1 Vs GDP 2.5 = 1.6%

2022 = Inflation 8.0% Vs GDP 1.9 = 6.1%

2021 = Inflation 4.7 Vs GDP 5.8 = 1.1%

2020 = Inflation 1.2 Vs GDP -2.2 = 3.4%

2019 = Inflation 1.8 Vs GDP 2.5 = 0.7%

2018 = Inflation 2.4 Vs GDP 3.0 = 0.6%

2017 = Inflation 2.1 Vs GDP 2.5 = 0.4%

2016 = Inflation 1.3 Vs GDP 1.8 = 0.5

2015 = Inflation 0.1 Vs GDP 2.9 = 2.8

2014 = Inflation 1.6 Vs GDP 2.5 = 0.9

2013 = Inflation 2.5 Vs GDP 2.1 = 0.4

2012 = Inflation 2.1 Vs GDP 2.3 = 0.2

2011 = Inflation 3.2 Vs GDP 1.6 = 1.6

2010 = Inflation 1.6 Vs GDP 2.7 = 1.1

Average Distance 1.52%

Brian Twomey

GDP Vs Inflation, Imports, Exports

2 Years data. Y = Inflation. X = GDP.

GDP Average 3.04. Inflation Average 3.38.

Current GDP = 3.4. Current Inflation = 3.5. Wow we have a breakout on the way.

GDP Vs Imports = +57%. GDP Vs Exports +72%.

Brian Twomey

GDP 93 Year Averages

From 200 economic data points, the Bureau of Economic Analysis produces and reports Real GDP due to elimination of price fluctuations from Inflation. Inflation for the BEA is measured by the Price Index for Gross Domestic purchases. The important measure is price changes paid for goods and services.

Similarly, the PCE consumption index is factored from the prices of Goods and services purchased by consumers. PCE is released alongside GDP.

On the opposite side to Real GDP is Nominal GDP as Inflation becomes a factor to measure Inflation in the price of goods and services produced including Exports but eliminates Imports. Nominal GDP factors the market value of all goods and services over each annual and 6 week period.

Real Vs Nominal GDP measures price changes Vs the value and output of all goods and services. Real GDP is factored by dividing Nominal GDP to the Price Deflator. While Nominal GDP is factored by Real GDP X price deflator. The price deflator measure the output produced by Inflation.

The GDP price deflator for Q4 2023 rose 1.7% and 3.3% for Q 2023 while Real GDP rose 3.4% on an annual basis. The price index for gross domestic purchases increased 1.9 percent in Q4 2023. PCE increased 1.8%.

GDP 93 Year Average

GDP from annual averages 1930 to 2023 = 3.45. The 5 year average = 2.28 and 10 year at 2.41. The 15 and 20 year trades 2.35 and 2.05. From 2 to 20 year ranges from 1.93 to 3.4 at the 4 year and 2.95 at the 2 year average.

The Congressional Budget Office aligns with my averages as they factor GDP at 2.2% from 2024 to 2027 then 2.1 in 2028 and 2029. After 2030, GDP travels to 1.6 lows.

GDP last at 3.4 and expected 2.5 is a massive move lower. GDP must first break 2.95 then 2.6 at the 3 year average. The line at 2.6 is most vital. If this line breaks then GDP heads to 2.41, 2.35, 2.31 and 2.28 at the 5 year average.

Current GDP at 3.4 trades at the 93 year average and should much lower from an average perspective.

A nation’s GDP at official exchange rates (OER) is the home-currency-denominated annual GDP figure divided by the bilateral average US exchange rate with that country in that year. The measure is simple to compute and gives a precise measure of the value of output. 

Brian Twomey

DXY V Exports

10 years. Y = Exports. X = DXY

Export Averages = 148.38, 152.68, 150.10, 143.61, 139.96, 137.80, 135.80, 133.93, 132.60, 132.35

Correlations = +31%, +28%, +65%, +67%, +62%, +65%, +67%, +61%, +58%, +45%

Brian Twomey

DXY Vs Imports, 10 Years

Y = Imports. X = DXY.

See why charts are Deceptive. The picture is always wrong. A picture must be quantified by statistics. Here’s where Pen, Paper and Calculator becomes the trading tool. The paper part for me is stacked to the roof but paper costs are cheap. Why I am never wrong. I figure and factor to ensure trade success and profits. But we would never sit all day, everyday in front of a computer.

A guy wrote a great book called Charts Lie. The best indicator over the long haul is Schrodinger Wave Equation. But much easier and quicker ways exist to trade and profit. Waves pretty much are sine / cosine waves and the reverse is Simple Regression.

10 Year Correlations = +63%, +20%, +67%, +67%, +61%, +64%, +65%, +51%, +55%, +23%.

Brian Twomey