Weekly Trades: EUR/USD and NZD/USD

Drivers and direction to Currency markets for the past weeks are USD and Non USD currency pairs. Those pairs currently determine cross pair direction. Certain weeks and periods, cross pairs drive USD and non USD but not this week nor for the past 4 weeks.
Not much excitement exists in this weeks currency prices as ranges are compressed and further compressing. Currency pair trade selection is key as not all currency pairs will perform as past weeks.


Central bank statements to not raise rates for years brings with it a slowdown to price speeds and range compression as interest rates are the primary drivers to currency prices from the 1972 free float inception to present day.


This week EUR/USD and NZD/USD will offer as weekly trades. Its a bottom NZD/USD Vs a top EUR/USD type trades. NZD/USD contains the lowest exchange rates among 65 + currency pairs. If the bottom falls then all currency pairs fall and it includes EUR/USD.


EUR/USD


Short 1.1825 and 1.1848 to target 1.1662
Short below 1.1639 to target 1.1499
Long 1.1499 to target 1.1566
long 1.1662 to target 1.1756.


NZD/USD


Short 0.6671 and 0.6687 to target 0.6579
Short below 0.6565 to target 0.6459.
Long 0.6459 to target 0.6539.
long 0.6579 to target 0.6644

Brian Twomey

Weekly Currency Pairs Order of Operations

Clear drivers and leaders to Currency markets over the past 4 ish weeks are USD Vs Non currency pairs. Non USD currency pairs are EUR/USD, GBP/USD, NZD/USD and AUD/USD Vs USD/CAD, USD/CHF and USD/JPY. Non USD currency pairs all trade above respective MA’s while USD pairs trade below.


The Non USD Vs USD lineup is correct. The correct lineup and sufficient ranges is what drove trades over the past month as clear long and short points were identified. Trades in USD Vs Non USD was the only trades of any profit value and the same situation exists in the current week. The same circumstance may exists for many weeks to come.


The non drivers and non leaders to Currency markets over the past 4 ish weeks are currency cross pairs in the universe of USD vs Non USD.


Viewed from EUR top and NZD bottom currency pairs, its obvious why cross pairs aren’t moving nor trading correctly and its due to cross pair mis positions.


NZD


NZD/USD trades above MA’s.
NZD/JPY trades above 69.56 by 2 pips.
NZD/CHF Trades below.
NZD/CAD trades below.


2 pairs trade above and 2 pairs trade below. This situation is clearly enough to compress ranges.


NZD/CHF for example is a dead issue to ranges due to its position between NZD/CAD and NZD/JPY. NZD/CAD’s correct position is above all NZD pairs and should be the first currency pair shown. NZD/CAD as first position and top currency pair drives the NZD universe. NZD/CHF’s correct position is bottom pair. When NZD/CHF assumes its correct position as bottom pair then it trades correctly and in its proper ranges. NZD/JPY lacks a clue to direction as it can easily fly either way. NZD/USD exits as the only clear trade.


EUR


EUR/USD trades above
EUR/JPY above by 12 pips
EUR/CHF below
EUR/CAD below
EUR/NZD Below by 2 pips
EUR/AUD above
EUR/GBP above.


EUR/USD is clear driver and only trade beside EUR/AUD. Ranges severely compressed as EUR/USD must decide the fate of its cross pairs.


GBP


GBP/USD trades above
GBP/JPY below
GBP/CHF below
GBP/CAD below
GBP/NZD below

GBP/AUD above by 3 pips. Ranges went into severe compression mode.


AUD


AUD/USD above by 2 pips
AUD/JPY below
AUD/CHF below
AUD/CAD below
AUD/NZD below


Ranges in AUD are good in relation to its counterparts and sufficient enough to see a good move for this week’s RBA announcement.


USD/CAD trades below its vital MA;s but contains excellent ranges.


EUR/USD, USD/CAD and AUD/USD contain the best ranges to trade this week as USD Vs Non USD drives this week markets.

Brian Twomey

GBP/USD and USD/CAD Trade Results

USDCAD Weekly Trade As Posted

Long Anywhere or 1.3104 and 1.3100 to #target 1.3341

Lows 1.3098, Highs 1.3259

Trade Runs +161 pips

The GBPUSD trade posted Sunday resulted in +328 pips. The downside target at 1.2896 traded to 1.2863 for an extra 33 pips. The reversal trade long from 1.2896 actually began at 1.2863. Note 1.2863 is 3 pips above out posted short point at 1.2860. Point at 1,2860 held and allowed the long trade to target 1.2954. Again, the long traded to 1.2978 and an extra 24 pips of gains.

Overall, 33 extra pips on shorts and 24 extra pips on longs.

GBP/USD

Short Anywhere or 1.3049 and 1.3064 to target 1.2892.

Highs 1.3079, lows 1.2863.

Trade ran + 216 Pips.

2nd Leg

long 1.2892 to target 1.2954.

Lows 1.2863, Highs 1.2978.

Trade ran + 115 Pips 2 trades, 3 days +328 Pips.

Total GBP/USD + USD/CAD +489 pips

Brian Twomey

Inside the Currency Market Recommended for ACI FX Dealing Certificates

I often thought about obtaining an ACI Dealing Certificate and I am again in serious reconsideration. While viewing the exams and certificates, I noted my book Inside the Currency Market was adopted and recommended for future test takers as a source to study for the various exams.

I am honored and thrilled in the highest regards

Weekly Trades: GBP/USD and USD/CAD

As reported September 8 to Long term targets, GBP/USD contained a 2020 target at 1.3200’s yet traded to 1.3400’s. GBP/USD traded again to 1.3400’s and matched its 2019 target. GBP/USD long term targets dropped 200 pip per year and the exact same pip count as AUD/USD yearly targets.


To follow standard reversal formulas to normal price trading upon target completion, 300 and 600 pips becomes the bottom points. From 1.3400’s and counting 600 pips, GBP/USD 1.2800’s is current bottoms. Current GBP/USD 1.2800’s remains solid at 1.2892, 1.2868, 1.2860 and 1.2829.


From 1.3486 top to 1.2823 lows,, GBP/USD traded 663 pips and close to the 600 pip formula. GBP/USD then bounced to current 1.3000’s.


From GBP/USD 1.3486 top and the 300 pip count then becomes a danger zone as 300 pips at 1.3186 now bumps against the 5 year average at 1.3166.


GBP/USD is now caught between a 300 pip trading range from the 5 year average at 1.3166 and the vital break at 1.2860. Below 1.2860 then GBP/USD trades much lower. A 300 pip trading range is fairly standard in currency markets today over the past 3 and 4 years. And again matches the 300 and 600 pip formulas.


The overall driver to GBP/USD are many long term averages at 1.5000’s. Currently, averages at 1.5000’s are deeply oversold and any drops to GBP/USD then the averages achieves richter scale oversold. In the way of top averages at 1.5800’s is the 5 year average at 1.3166, 10 year average at 1.4526 and 14 year average at 1.5406.


GBP/USD from 1.4526 to 1.3166 equates to 1360 pips or a mid point at 680 pips. From 600 pips is then broken down to 300 pips to factor overall trading ranges.


USD/CAD 5 year average is located at 1.3190 and the 10 year at 1.1922. At 1268 pips, a mid point exists at 634 pips and again the 600 pip formula.


Longer term, USD/CAD is overbought and matches GBP/USD oversold.


Weekly Trades GBP/USD and USD/CAD.


GBP/USD and USD/CAD are the exact same pairs with matching exchange rates except both trade in opposite directions. Daytrades for GBP/USD and USD/CAD move by exact pips only in different directions. The daytrade count falls into the 300 and 600 pip formula.
GBPP/USD is deeply overbought while USD/CAD is deeply oversold.

GBP/USD

                        GBP/USD

Short Anywhere or 1.3049 and 1.3064 to target 1.2892.
Short below 1.2860 to target 1.2765.


Long 1.2765 to target 1.2829
long 1.2892 to target 1.2954

USD/CAD


Long Anywhere or 1.3104 and 1.3100 to target 1.3341
Long above 1.3359 to target 1.3470.


Short 1.3470 to target 1.3396.
short 1.3341 to target 1.3247.


Note to GBP/USD target at 1.2892 and USD/CAD at 1.3341.

GBP/USD current opening price at 1.3041 and USD/CAD 1.3115, a separation of 74 pips. The visual to the GBP short trade is GBP/USD trades below USD/CAD. For GBP/USD to trade higher, it must cross above USD/CAD. For USD/CAD to trade lower, it must cross below GBP/USD.


At 74 pips warns to a giant move ahead for both GBP/USD and USD/CAD as both will meet the 300 and 600 criteria.


All trades as usual are factored by pen, paper and calculator. No stops, charts, graphs nor screen watching.

Brian Twomey

Trade Results: GBP/USD, EUR/USD, AUD/USD

The weekly GBP/USD trade posted, forecast and traded ended as 2 perfect trades to entries and targets. AUD/USD target at 0.7080 failed at 0.7095. The EUR/USD trade runs +83 pips and its target is yet to complete. EUR/GBP is what it is and like USD/JPY and USD/CHF, its not worth clicks.


Overall, nothing new to targets and trading as its been a standard practice for 10 + years.


GBP/USD


Short 1.2991 and 1.3007 to target 1.2863
Highs 1.3007, Lows 1.2865
1 pip to target
Perfect Entry and target
Trade Ran +142 pips.

2ng leg


Long 1.2863 to target 1.2927.
Lows 1.2865, Highs 1.2828
Trade Runs +63 pips


Target complete


2 trades + 205 pips and 2 perfect targets

Alternative to 2nd leg is GBP day trade because the 3rd leg to the trade was 1.2831 as most vital high/low break. GBP/USD had 2 options. The first was break 1.2831 then GBP targets lower or GBP had to bounce.

As posted many supports exists to GBP/USD in the 1.2800’s so for this week, the long to 2nd trade was assured. To resort to a day trade only would’ve profited by about 60 ish pips but the day trade was far more guaranteed due to my perfection placed to day trades.


EUR/USD


Short 1.1790 and 1.1802 to target 1.1628
Highs 1.1807, Lows 1.1724
Trade Runs +83 pips


Long way to target


AUD/USD


Short 0.7227 & 0.7237 to target 0.7080.
Highs 0.7208, Lows 0.7095
Trade now runs + 113 Pips.


AUDUSD dropped 19 pips before 0.7227 entry and target fell short by 15 pips.


4 trades, 3 days and +401 pips


As usual, trades are few but profits high. Imagine profits to the weekly 18 pairs traded every week. And no stops, no screen watching, no charts. My pen, paper and calculator is far more powerful.

Brian Twomey

AUD/USD Trade Results and RBA

Here’s the AUD/USD trade for RBA.
Short 0.7227 and 0.7237 to target 0.7080.
Highs 0.7208, Lows 0.7146.


A 4 hour trade now runs + 63 Pips.


AUD/USD dropped 19 pips before the 0.7227 entry.


A further drop in AUD/USD is dependent on EUR/USD and most specifically EUR/AUD.
EUR/AUD vital high/low point is located today at 1.6459. However AUD/EUR high/ low point is located at 0.6079 or EUR/AUD 1.6450.


EUR/AUD’s crucial area between 1.6459 and `1.6450 is a 9 pip zone and not tradeable. This means EUR/AUD requires a break of 1.6450 or 1.6459 in order to trade EUR/AUD and to determine AUD/USD’s further direction.


if EUR/AUD breaks above 1.6459 then AUD/USD drops further. If EUR/AUD drops below 1.6459 then AUD/USD rises again. AUD/USD is crucially dependent on AUD/EUR for direction and pip movements and this relationship will never change.


AUD/USD for today’s day trade contains a top at 0.7193 and 0.7198 and a good entry for shorts.


EUR/AUD however contains a correlation problem as EUR/AUD correlates to both AUD/USD and EUR/USD at -97% and -98%. EUR/AUD is a lost currency price but AUD/USD and EUR/USD Correlate at =98%. EUR/USD for the week will drop.

AUD/USD for the week will drop and shorts is the way as posted for EUR/USD on Sunday.

Seen to trades week after week and over many years is my pen, paper and calculator at work.

    Brian Twomey 

AUD/USD Trade Results and RBA

Here’s the AUD/USD trade for RBA.


Short 0.7227 and 0.7237 to target 0.7080.
Highs 0.7208, Lows 0.7146.


A 4 hour trade now runs + 63 Pips.


AUD/USD dropped 19 pips before the 0.7227 entry.


A further drop in AUD/USD is dependent on EUR/USD and most specifically EUR/AUD.


EUR/AUD vital high/low point is located today at 1.6459. However AUD/EUR high/ low point is located at 0.6079 or EUR/AUD 1.6450.


EUR/AUD’s crucial area between 1.6459 and `1.6450 is a 9 pip zone and not tradeable. This means EUR/AUD requires a break of 1.6450 or 1.6459 in order to trade EUR/AUD and to determine AUD/USD’s further direction.


if EUR/AUD breaks above 1.6459 then AUD/USD drops further. If EUR/AUD drops below 1.6459 then AUD/USD rises again. AUD/USD is crucially dependent on AUD/EUR for direction and pip movements and this relationship will never change.


AUD/USD for today’s daytrade contains a top at 0.7193 and 0.7198 and a good entry for shorts.


EUR/AUD however contains a correlation problem as EUR/AUD correlates to both AUD/USD and EUR/USD at -97% and -98%. EUR/AUD is a lost currency price but AUD/USD and EUR/USD Correlate at =98%. EUR/USD for the week will drop. AUD/USD for the week will drop and shorts is the way as posted for EUR/USD on Sunday.

Brian Twomey

AUD, RBA and Interest Rates

The RBA Overnight 1 month OIS Swap Rate at current 0.13 held everyday since June 15 except for 2 days, August 5 and 6. Since March, the 1 month Swap Rate ranged from 0.13 to 0.17. The change is meaningless to AUD movements.


The most vital 3 month Bank Bill Rate held 0.08 to 0.11 since April. And again the change is meaningless to AUD as not enough interest rate movements eists for AUD to trade other than tiny ranges to reflect interest rate moves.


The remainder of RBA Bank Bills and OIS Swap rates traded in the same no range capacity as the 1 and 3 month rates. Essentially, AUD interest rate markets went completely dead since March/April but all nation’s interest rate markets also went completely dead since March/April.

The only positive if any mention is RBA interest rates trade in a fairly correct lineup as all interest rates trade below headline at 0.25. AUD and the RBA is not unusual as all nation’s interest rates currently trade below headline and this set up includes the Fed.

The first rate below headline is the Effective interest rate and all remaining interest rate maturities trade around the effective rate. Here’s where is found day trades offered freely by all central banks.


Good example is GBP and the BOE. Current headline is 0.10 and the Effective rate termed Sonia is at 0.05 and currently 1/2 the distance to 0.10.


The last days BOE interest rates trades as follows: 0.0509, 0.0533, 0.0541, 0.0541, 0.0539, 0.0539, 0.0541 and 0.0538. This represents a sad day to market movements as no movement to interest rates translates to no movements to currency prices.

The central banks not only flattened daily ranges but current markets are trading at the lowest daily movements since EUR introduction in 1999.

5 Day Rule


The 3 month rate and RBA maturities must change by at least 5 basis points within 5 days then markets are alerted to an impending rate change. RBA rates fails in this regard as no movements exist. Only rare days does the RBA and central banks surprise with a rate change.
The RBA currently stands on hold and to follow the FED, may stand on hold for years to come. A lower headline from 0.25 threatens effective and interest rate maturities to trade to zero and easily to negative as was seen by the RBNZ rates last week.


AUD/USD


The positive to AUD/USD this week is ranges are trading wide. This means no matter the RBA decision and any statements, AUD has potential to move far and wide.


AUD/USD Weekly Trade


Short 0.7227 and 0.7237 to target 0.7080.
Short below 0.7054 to target 0.6924.


Long 0.6924 to target 0.7011
long 0.7080 to target 0.7162.


Current AUD moving averages are rising and this means any price trading above 0.7237 is an extra bonus for more AUD short profits.

Brian Twomey

Weekly Trades: EUR/USD, GBP/USD, EUR/GBP

EUR/GBP at the 0.9052 close sits between big level 0.9043 and minor point at 0.9061. A break below 0.9043 targets easily 0.8963 and above 0.9123. From EUR/GBP 0.8963 and 0.9123 translates to GBP/USD 1.2702 below and 1.2958 above.


Vital to GBP/USD at 1.2700’s is many and massive supports exists at 1.2844, 1.2833, 1.2831, 1.2833 and 1.2800.


The EUR/GBP break or hold at 0.9043 is the crucial key to GBP/USD movements.


Weekly Trades


GBP/USD


Short 1.2991 and 1.3007 to target 1.2863
Short below 1.2831 to target 1.2719.
Long 1.2719 to target 1.2799
long 1.2863 to target 1.2927.


EUR/USD


Short 1.1790 and 1.1802 to target 1.1628
Short below 1.1603 to target 1.1504
Long 1.1504 to target 1.1578
long 1.1628 to target 1.1752


EUR/GBP


Short 0.9134 and 0.9144 to target 0.9063.
Short 0.9043 to target 0.8982.
Long 0.8982 to target 0.9023.
Long 0.9063 to target 0.9104.

Brian Twomey

FX Closing Prices

As a follow up to the last post in regards to Trump’s election victory. Poll after poll reports Biden ahead. Yet view the polls and what is revealed is Democrats are over sampled to Republicans. Likely voters are not sampled. Can anyone believe polls are truly random sampled.


Then comes the weights used and adjusted to probabilities, who are actually sampled from the population. Sample all blacks and over sample Democrats to Republicans then reports are seen Blacks by overwhelming majority favor Biden


Most important for Polls is the Margin of Error. A high Margin of Error reveals few voters were polled and vice versa, a low Margin of Error divulges a larger number of voters were polled. The larger number of voters polled then the better are the results to true poll accuracy.


The Biden polls are sampling at most 1000 voters and this leads to a high margin of error. Polls of the type are wrong and reveal nothing.


Close price forecasts as we look ahead to next week’s trades.


USD/CAD 1.3268 and a decent long ahead next week.
EUR/USD 1.1704. Another week in a tough position.


GBP/USD 1.2886 assumes 1.2822 holds. Decent to longs.
GBP/CHF. 1.1913. Problem as ranges went dead so don’t expect much next week. Yet GBP/CHF holds support for GBP/USD and GBP/JPY.


EUR/JPY 123.49 assumes 122.98 holds. Also decent longs.
GBP/JPY . 135.67. This price warns to caution to EUR/JPY holding 122.98.


AUD/USD 0.7114. Good longs.
NZD/USD 0.6602. Good longs


EUR/AUD. 1.6363. Terrible position ad may means AUD/USD is vulnerable to lower.
GBP/AUD 1.8048. The reverse story to AUD/USD vulnerable to lower prices next week.


EUR/NZD 1.7689. Decent long and same story as AUD. Means caution to NZD/USD higher.
GBP/NZD 1.9453. Opposite story to EUR/NZD and NZD/USD lower.


AUD/JPY. 75.32 to 75.08. Good position. Says AUD/USD higher next week on track.


Overall prices for the past roughly 3 weeks are functioning normally and expected to hold this normal position for many weeks t come. Normality began when EUR/USD dropped to 1.1900’s and 1.1800’s.


Last note. GBP/USD, GBP/JPY, PLN/HUF and USD/PLN weekly trades all achieves targets and reversals. PLN/HUF and USD/PLN achieved +1000 pips alone.

Brian Twomey

The 2020 Election and Trump Victory

As stated at the start of Trump’s term, the objective for Trump is to put the sledge hammer down on the Democrats or his 4 year term will be in jeopardy to success.

Instead of the sledge hammer, Trump deployed a small hammer and finessed his successes by policy triumphs in tax breaks, eliminate regulations on the economic side and eradication of Obummer care, oil independence and a slew of accomplishments to numerous to list. Business and the masses benefited economically from Trump policies.

Trump’s second leg to policy achievements was the constant communication to the masses and the masses reciprocated by massive Trump support.

Coupled with every policy attainment and mass support, Trump eliminated the Democrats in the policy process and success brought a massive distinction between Republicans and anachronistic Democrats.

Trump’s greatest failure and now a problem for the 2020 elections is not prosecute the Democrats for treason and numerous felonies committed in the 2016 election. Trump should’ve released all the documents hidden on purpose in government agencies such as the State Department, CIA, FBI, DOJ.

Traditional Republicans never were strong fighters against the Democrats dating to Lincoln in the 1860’s. Republicans never fought against America’s greatest enemies: Wilson, F Roosevelt and Lyndon Johnson otherwise America would be in a far greater place economically, culturally and socially than it is today.

Non prosecution and Democrat’s ability to escape treason and felonies, now leads to a far broader Republican problem to mail in ballots. Historically and holds today is the Democrats are clearly the smartest yet most evil organization ever formed in world history.

The Democrats know at this stage they can’t win elections nor would America accept Democrat policies. The Democrats face the challenge as they did when Republican presidents ruled from 1861 to Wilson in 1912. Literally 50 years of Republican Rule and the time of building America to the modern day from the ashes of the Civil War.

Democrat Plans

Nov 3 on election day, every street corner in America will see protesters, riots and destruction as never seen before. Black Lives Matter over last months was a trial run.

The derivation of Black Lives Matter. Occupy Wall Street and many other groups was the result of America’s Bummmer when he established during his presidency Community organizer companies. The organizations lack no shortage of people to sign up for $20 per hour and retain all stolen merchandise.

We’ve seen this story before in America when the Democrats stole the southern United States from total Republican control from the 1860′ s to 1890’s. The Democrats released the KKK, militia and Gun Groups to stand at voter precincts to force votes for Democrats. Republican officeholders were threatened with death if they failed to drop out of political races against Democrats. Many lost their lives and many fled their home states. Democrats held the south 80 years from the 1890’s to 1972 and Nixon’s Southern Strategy.

Election Scenarios

In the event of a Electoral tie vote and this maybe possible to a Biden win, then Article 2, Section 1, Clause 3 says a tie vote goes to the House of Representatives for a vote. The Democrats control the house and would vote Biden as President. This scenario was always my choice as Democrat strategy to elect Biden. Not necessarily by Electoral votes but find a way to throw the race to the House to vote Biden by a differential to popular vs Electoral votes.

We’ve seen this story 4 times in America’s history and the last was the 1877 race between Democrat Tilden vs Republican Rutherford B Hayes. Tilden won the popular and Electoral votes to become president but Republicans challenged the votes in 3 southern states, Florida, Louisiana and South Carolina and by a vote from the newly formed Electoral Commission, Hayes was voted President.

Democrats agreed to Hayes as President provided Hayes removed Federal troops from the South and eliminate Republican’s Reconstruction of the South. Well this gave Democrats full control to the south in electoral victories as Governors, Mayors and City Councils.

Contingent Elections

In the case of an Electoral College deadlock or if no candidate receives the majority of votes, a “contingent election” is held. The Election of president then goes to the House of Representatives.

Democrat demands today are Puerto Rico and Washington DC to become states, eliminate the Electoral College and more elected Senators to California.

The Electoral College is a mainstay since America’s beginning. Its what made America a Republic rather than a Democracy. Eliminate the Electoral College then only the popular vote survives to Presidential victories. This transforms America into a Democracy with ability to buy votes by office seekers. Th Electoral vote however is binding by law as Electors must vote the leading vote getter from each state.

The Democrats tried many times in the 1970’s to eliminate the Electoral College and failed specifically in the 91st Congress from 1969 to 1971.

California’s 50 + million people are represented by 1 Senator and California is a total Democrat State since 1992. The Democrats want 5 Senators. For California, Puerto Rico and Washington DC to become states and more representation to California, Congress must change the borders to create Federal districts.

Democrats crooked plan is the usual bully approach as they must overwhelm the system with Democrat Votes to claim the electoral system doesn’t work, its illegitimate, faulty. Democrats will claim see all the protestors in favor of Biden. Those are just ordinary citizens. Trump is the bully because he won’t leave the Presidency. Democrats will claim victory at every turn.

Can the Courts decide this election. The question is can anybody distinguish between legitimate Vs faulty votes. Democrats have mastered faulty votes throughout their entire existence as a party dating to Jefferson.

They key to votes is Trump must receive an overwhelming majority of electoral votes to defeat Democrats attempt to steal the election by popular vote and only then can courts rule in Trump’s favor as Electoral votes are most binding by Constitutional standards. Courts can’t rule against the Constitution nor rule against electors. Yet an imperative exists to vote Amy Barret to the courts to give Trump a super majority and no chance for defeat.

 

Brian Twomey

 

Weekly Trade Results: GBP/USD, GBP/JPY, USD/PLN, PLN/HUF

USD/PLN

USDPLN Weekly trade as Posted 

Short 3.9366 and 3.9455 to target 3.8739 then 3.8694.

 Highs 3.9411, Lows 3.8683

Target Perfect

Trade Runs +728 pips

target complete

USD/PLN 2nd and 3rd Legs

 Long 3.8694 to target 3.8829.

Short 3.8471 to target 3.8113.

We shooting for Long 3.8694 to target 3.8829 

 

GBP/USD

2nd 3rd legs traded

Long above 1.2819 to target 1.2953

Highs 1.2931

Trade ran 112 pips

Short 1.2953 to target 1.2853

Lows 1.2827

Trade from 1.2931 to 1.2827, +104 pips

2 trades, 1 day +216 pips.

 

GBP/JPY

2nd Leg Traded

Long above 135.82 to target 136.93

Highs 136.24

Trade Running +42 Pips

PLN/HUF

Short 80.86 and 80.96 to target 80.05.

Highs 80.64 and just entered short

Trade ongoing

 

3 trades, 2 days, +944 Pips

 

Brian Twomey

 

Weekly Trades: GBP/USD, GBP/JPY, USD/PLN, PLN/HUF

At least 20+ currency pairs begin the week sitting either on solid supports or strong resistance points above. EUR/USD 1.1609 Vs USD/JPY 105.96 for example. Both are exact opposite pairs. NZD/USD 0.6557 Vs AUD/USD 0.7066. AUD/JPY 74.84 Vs EUR/JPY 122.98. Prices at vital price points contain ability to fly either way.

Not much happening with currency prices to trade from the open as patience is required this week to wait on our entry points.
PLN/HUF is deeply overbought short, medium and long term and encompasses a long term target at 76.19 from current 79.88. PLN/HUF arrives at 76.19 upon breaks at 79.85 and 77.28.

Despite a lofty target, PLN/HUF target will take time as weekly ranges are fairly dead within `100 pip weekly moves. By trading PLN/HUF is the same as trading USD/PLN only a slim down version as weekly pip ranges are small compared to 800 and 100o pip weekly ranges to USD/PLN. A low Vs high range currency pairs.

For PLN/HUF is overbought as well as USD/PLN. PLN/HUF will assist to bring down USD/PLN this week.
GBP pairs this week are best to overall trades while the remainder pairs must wait for the breaks to occur.

PLN/HUF

Short 80.86 and 80.96 to target 80.05.
Short 79.85 to target 78.83
Long 78.83 to target 79.54.
Long 80.05 to target 80.45.

USD/PLN

Short 3.9366 and 3.9455 to target 3.8739 then 3.8694.
Short 3.8471 to target 3.8113.
Long 3.8113 to target 3.8024.
Long 3.8694 to target 3.8829.

GBP/USD

Long 1.2687 and 1.2670 to target 1.2803
Long above 1.2819 to target 1.2953
Short 1.2953 to target 1.2853
short 1.2803 to target 1.2754.

GBP/JPY

Long 134.07 and 133.92 to target 135.66
Long above 135.82 to target 136.93
Short 136.93 to target 136.14
short 135.66 to target 134.87. Long only strategy.

 

Brian Twomey

Weekly Trade Results: AUD/USD and AUD/JPY

AUDUSD and AUDJPY Weekly Trade Results

Noted after the fact to Posted trade instructions was not fully complete nor mentioned to overall price Paths.

AUDUSD 1st leg +124 pips to 0.7193.


2nd leg
long from 0.7193 to 0.7279 profit +33 pips but failed to achieve target.

Here’s full instruction not posted.

Short 0.7107 to target 0.6993. 
AUDUSD Broke 0.7107 and lows 0.7028 so far.
The break 0.7107 meant 0.7193 longs were in trouble for 86 pips.
But 0.7107 to 0.7028 +79 pips.
A wash out but remains +124 pips from original trade.

                                  AUDJPY

 Longs from week’s start at 75.94 and 76.08 profit 44 pips.

Mistake to not post full price path to break 75.46 then short to target 74.49.

Lows 73.99 or Running +50 pips.

Break 75.46 meant longs from 75.94 were in trouble. by 58 pips. yet the break short at 75.46 runs +50 pips so another wash out trade.

JPY Cross pairs as mentioned began in a position to an interesting week and they didn’t fail us to interesting.

JPY cross pairs became leader currencies this week.
Go figure that happening and the answer is hardly ever, especially a dull pair  as USDJPY and a pair not worth a click for last few years.

                  Brian Twomey

Stock Market Trade by Interest Rates

An Equity Derivatives trader. Don’t know what this title means. My assumption is stock prices are factored from yield curves.
In the old days of trading, all financial instruments especially currencies were traded along the yield curve. Still widely exists today as a strategy among the smarter traders but its never seen or mentioned anymore.

Many examples how to trade the EUR/USD from yield curves are located on this site.

Currency trades from yield curves for example, are traded as yield crossovers between nations such as USD/CAD vs the USD and Canadian 2 and 3 year yield. Longer term trades are factored from 5, 7 and 10 year crossovers. A trade may factor from a single nation’s yield curve.

Trades may factor for another example by ranges of certain yields. The trade is short and long at tops and bottoms of yield ranges. What’s important in this regard is Currency trades are also traded by Forward Points and Forward Points are located at each yield. The higher price travels up the yield curve then the more forward points increase in ranges.

The same concept exists to currency and all financial market prices. As prices travel up the yield curve then the more ranges expand. But so does tops and bottoms become important as location is most vital to a price yet its the least understood concept among today’s traders.

A price trading at the 10 year yield contains much daylight to drop as the only points remaining on a yield curve is the 20 and 30 yield and its the tops. A price can’t and won’t travel higher than a 20 and 30 year yield.

The concept to overbought and oversold is found in the location of a price along its interest or yield curve. The better concept is to high or to low. A price trading at the 10 year yield is overbought or to high while a price at the 1 year yield is low or oversold.

Another way to trade currencies is by the interest rate curve and its my way. Interest rates are lower and trade below yields. They are the first rates offered by central banks daily and interest rates prices yields.

Most vital is all financial instruments trade by an interest rate either as a pure interest rate or yield. Its impossible not to trade a price by an interest rate of some sort as market prices move, currencies especially, by an interest rate.

I factored today’s S&P’s by this morning’s yield curves to understand an Equity Derivatives trader. Using yield curves for trading is a view to longer term trades as ranges are extremely wide.

1. The S&P’s opened at 3281. 06. All financial prices open and close many, many times at equilibrium. Viewed better to understanding is open and close at neutral. The S&P’s opened today at neutral 3281.06. This price had an equal chance to rise or fall and this is what neutral means.

2. What is factored 1st is a yield rate and this rate is calculated above and below. Above means factor from normal yield rates and below means factor the inverse of yield rates. The purpose is to understand interest ranges and averages to our financial price trades.

Above yield rates from the 3 month rate at 0.081 to 1.417 at the 30 year factors using the current Fed overnight rate at 0.09.

Mean. 1.0673

Median 1.00 or Parity

SD. 0.4056.

Above range factors

Mean. 3502.18

Median. 3281.16

SD. 1330.01.

Range Averages factors

Mean.3502.18

Median. 3286.89

SD. 368.15

Check for yourself as today’s trade able levels: 3281.17, 3281.22, 3281.54, 3282.43, 3284.23, 3286.89, 3319.85,3419.53, 3583.37, 4126.24 and 4377.59

Bottom.

Interest Rates

Mean: 0.0106

Median. 0.0099

SD. 0.0040.

Top Vs Bottom Interest rates ranges: 1.0673 Vs 0.0106.

Range Averages

Mean. 3500.28

Median. 3281.05

SD. 1361.23

Average of Ranges

Mean: 3523.85

Median: 3346.67

SD: 373.79

Results

BY taking range averages for tops and bottoms, we have: 3523.85, 3500.28, 3502.18 and 3502.18.

4 numbers represents most vital averages. Same principle and concept is employed and holds for our currency day trades. Its a must know to where vital averages are located above and below for any given day.

We know every vital range point from 1607.71 to highs at 6627.74.

We know interest rates and interest ranges. Its learned over time how to understand and interpret the interest rate averages to an interest rate as to high or low in relation to high and low financial prices by taking the interest rate X and divide by the average price. You’ll find a market price and the inverse to the market price.

As can be seen from the list above, yields offers today’s trade yet ranges are extremely wide. And its why I don’t like using yields for an S&P trade but rather central bank interest rates. Ranges are not as wide as yields.

Trade by Inverse.

The inverse price to 3281.06 is 0.00030.

The overall ranges to inverse prices are located from 0.00030 to 0.00041. Inverse prices are located at vital range points. Much easier to trade by inverse numbers as ranges are much smaller and they don’t change by much each day.
To trade any stock market is to know each nation’s interest rate. Its perfectly accurate for trades daily and long term. Its impossible not to be accurate.

The sad part to professional and perfect method trading is the concepts disappeared from public view in favor of speculators with money but not a clue to what they do and why.

 

Brian Twomey

 

 

Weekly Trades: AUD/USD, AUD/JPY and 18 Currency Pair Analysis

Best description to overall currency market prices last week was balanced, settled, centered, at equilibrium. The same description applies this week to currency prices and it means no dramatic moves are expected and no significant breaks to main averages. Range trading is again the order for the week.

GBP pairs represent slight outliers to balance as GBP/USD again sits on massive supports at 1.2800’s while all GBP cross pair prices are low, oversold and expected to rise significantly this week. Yet any GBP rises are trades within respective ranges.
GBP/NZD offers the best longs along with its counterpart EUR/NZD.

GBP/NZD will outperform EUR/NZD. GBP/NZD is truly an outlier currency pair due to its wide and expansive ranges. It should trade easily at 1.9400’s and 1.9500’s but miniscule ranges to GBP/USD are holding GBP/NZD to trade to its full potential.
GBP/AUD will outperform its counterpart EUR/AUD.

For EUR/AUD will range trade against its main counterpart AUD/USD. No such price exists to EUR/AUD above 1.6400’s. GBP/AUD outperformance is explained by expansion of weekly ranges over the past 3 weeks. GBP/AUD requires a break of many averages at 1.8100’s to move higher.

GBP/CAD ranges this week went dead again and no big moves expected. GBP/CAD ranges expand and contract based on the GBP/USD and USD/CAD relationship. GBP/USD at 1.2900’s and USD/CAD at 1.3100’s warns to a big move ahead and only then will the big trade for GBP/CAD exist. EUR/CAD is the better trade.

GBP/CHF price longer term is low and deeply oversold. It must and will eventually trade to 1.1900’s and 1.2000’s easily. This week however, GBP/CHF price lacks movement ability and will trade in tiny ranges. This means its performing its vital function to act as support to GBP/USD and GBP/JPY to allow both to move higher.

The message from GBP/CHF this week is all CHF pairs as Other Pair/CHF are all overbought. NZD/CHF offers the best and easiest trade for shorts while AUD/CHF and GBP/CHF offers low yet decent ranges. The weekly trades aren’t dead issues but better trade choices exist.

USD/CAD and CAD/JPY are again mis positioned this week. CAD/JPY is a low range currency pair and ,its matched by a good and fairly normal USD/CAD range. Its CAD/JPY mis positioned against USD/CAD.

Most interesting trades this week are JPY cross pairs against Non USD counterparts such as GBP/USD Vs GBP/JPY, AUD/USD Vs AUD/JPY, NZD/USD Vs NZD/JPY and EUR/USD Vs EUR/JPY.

Best combo trade is found in long GBP/USD and GBP/JPY as GBP/USD will be the leader this week to GBP/JPY because its sits on solid supports.

Correlations informs to the JPY cross pair vs Non USD alignments as EUR/USD Vs EUR/JPY run +98%, AUD/USD Vs AUD/JPY run +99%, EUR/JPY Vs AUD/JPY run +98%, This means non USD will run together with JPY cross pairs.

No need ever to run Correlations to GBP/USD Vs GBP/JPY as Correlations rarely if ever break. The GBP/USD Vs GBP/JPY relationship was solidified as one dating to the 1930’s when the BOJ pegged GBP/JPY to Gold.

USD/JPY price is low and oversold from 106.00’s to 108.00’s. For USD/JPY must break 105.81 to move higher to target 106.00’s and 107.00’s. Massive resistance exists at 108.00’s.

EUR/USD is a range trade and balanced this week. Break of 1.600’s changes trend to a lower EUR/USD. EUR contains the opposite line up as GBP pairs. EUR/JPY sits just above a big break point and no threat to EUR/USD breaking 1.1600’s. For GBPUSD sits on big break point to move lower while GBP/JPY price is low and oversold.

NZD/USD price sits just above solid supports at 0.6600’s and 0.6500’s. The averages at supports are many and massive. Only a break at 0.6500’s changes NZD/USD direction to short.

NZD/JPY however trades just above massive supports. No chance for NZD/USD to break 0.6500’s and this allows a combo trade to NZD/USD and NZD/JPY.

If NZD/USD breaks its 5 year average at 0.6809 then much higher for all non USD pairs such as EUR/USD, GBP/USD, and AUD/USD.

AUD/USD contains no chance to break low 0.7100’s this week to change its trend to a lower AUD and AUD/JPY like its counterparts EUR/JPY and NZD/JPY , trades just above supports.

Weekly Trades AUD/USD Vs AUD/JPY

AUD/USD

Short 0.7336 and 0.7350 to target 0.7193.

Long 0.7193 to target 0.7279.

AUD/JPY

Long 75.94 and 76.08 to target 78.11

Short 78.11 to target 76.18

AUD/JPY supports located at 75.46.

As a new week begins, we trade 18 currency pairs continuously without fail from Sunday to Friday or from target to target.

 

 

Brian Twomey, Contact brian@btwomey.com

 

 

 

 

Negative Vs Positive Interest Rates: NZD

The difference between positive and negative Interest Rates is for the most part, nothing. The only change is positive interest rates will work on a negative scale instead of the positive spectrum. Computations are the same except for the negative minus sign.

Overall, negative interest rates are meaningless to FX prices and EURUSD is the prime example, now 6 years in existence. The only possible difference seen is to daily Fx ranges however central banks have this aspect fully covered so FX prices don’t move and to contain prices to tiny ranges. The EUR/USD for example at the 2014 time to go negative contained 75 and 80 pip daily ranges and today, the range was cut by 1/2.

The NZD 5 year Yield went negative -0.02 today from positive 0.01 yesterday. For NZDUSD, the negative rate expanded the overall range 94 Vs 144 pips to be exact but only for the interest Maturity at -0.02. Overall, nothing changed for NZD prices as other maturities compensates for the 1 negative maturity. If all RBNZ rates go negative then nothing changes to NZD.
No difference to interest rate traders except to calculate trades from a negative perspective as ranges remain the same from negative to positive rates.

Used correctly by central banks, negative interest rates is a smarter move than positive rates as positive rate scales conceivably can shoot to infinity while Negative rates contains a known bottom at minus 0.0 and the top side is located at + 0.0, or +0.00 to -0.00. negative rates allow for smaller trade ranges.

For Monetary Policy, negative rates says much more as central banks since 2008 refuse to rescind stimulus and allow GDP and positive interest rates to skyrocket to allow populations and economies to experience economic prosperity.

Negative interest rates informs how much damage was caused over 12 years. Never forget the overall formula as interest rates and money supplies share an adverse relationship and done by central bank design. The more money is added to the system then the more interest rates drop. GDP under stimulus scenarios doesn’t contain any chances to rise to its natural level. Stimulus ensures interest rates and GDP remain lower for longer.

However Monetary Policy under negative interest rates without stimulus is actually a panacea to positive economics as interest and GDP ranges work inside a vast different corridor to overall price systems.

Further reads are Silvio Gesell “The Natural Economic Order” and Knut Wicksell “Interest and Prices”. Anything written by Knut Wicksell is a must read.

NZD/USD now approaches its vital 5 year average at 0.6809. A huge break and commentary to overall market prices as the bottom pair among all 28 informs all other currency pairs will follow NZD’s break. EUR/USD broke at 1.1200’s and GBP/USD is yet to follow at its 5 year average at 1.3196.

 

Brian Twomey