EUR/USD, AUD/USD and NZD/USD begins the week overbought. Same story as last week. USD/CHF and USD/CAD begins the week deeply oversold. Same story as last week. USD/JPY went from perfect neutral last week to overbought this week. USD/JPY is clearly divergent to its counterpart USD/CHF.
GBP/JPY, EUR/JPY, CAD/JPY and CHF/JPY begins the week overbought while AUD/JPY and NZD/JPY holds neutral positions. Same story as last week. AUD/JPY closed last week at 85.11 and 85.05 this week. Neutrality held.
EUR/CAD, GBP/CAD, AUD/CAD and NZD/CAD are deeply oversold along with USD/CAD. Same story as last week.
Next comes divergent problems.
EUR/NZD is oversold while GBP/NZD is overbought. What does this forecast to NZD/USD.
GBP/AUD is deeply overbought while EUR/AUD is neutral. How does AUD/USD handle this situation. EUR/AUD higher must break 1.5635 and 1.5654 from its close at 1.5599.
EUR/CHF, GBP/CHF, AUD/CHF and NZD/CHF closed directly on vital high/low levels while CAD/CHF sits at overbought.
GBP/USD sits neutral to overbought while overbought to GBP/JPY. Watch GBP/JPY 154.30.
Problem pairs this week remains the same as last week as follows: EUR/USD, EUR/CHF, GBP/AUD, AUD/NZD, GBP/NZD. Current levels are far to high. The same can be said for an assortment of currency prices to levels far to low. USD/CAD and the CAD cross pairs are excellent candidates.
DXY closed at 90.28 and 90.23 last week. Same story as last week. DXY ranges from 90.24 to 91.57 then 92.89 then 93.70. No changers in 3 weeks.
EUR/USD must break for lower, 1.2053, 1.2041 and 1.2028. Above 1.2190, 1.2258 and 1.2327
Overall, currency markets contain 2 problems. USD is miles to low, EUR/USD and non USD pairs to high and ranges remain deeply compressed. Without progress to current prices, ranges remain constricted and weekly prices go nowhere.
Currency prices not only lack uniformity but 5, 10 and 15 year averages assist to disjointed moves. Current markets are treacherous as currency pair trade selection is most vital and far different from uniform and most profitable markets in 2018, 2019 and parts of 2020.
From 18 currency pairs traded every week, 9 are viable trades to include only 4 cross pairs.
USD in the EM market this week sits at deep oversold and the same story as last week. Ranges are not only severely compressed but EM markets have been dead over the past month to trade 4 and 500 pips. Rare day for EM.
The changes this week is a deeply oversold USD/HUF, overbought USD/MYR and oversold USD/RON which is not unusual, USD/RUB begins the week deep oversold as well as USD/CZK. Both are range currency pairs rather than trends.
Wide rangers USD/TRY sits at deep overbought while oversold to USD/BRL. View USD/BRL as the same pair to USD/CAD as its close proximity. USD/BRL Vs USD/CAD Correlations are running +68%.
USD/ZAR sits at fairly neutral while the 6 handle currencies, USD/CNY, USD/DKK and USD/HRK are massively oversold.
USD/BRL Long 5.2692 and 5.2678 to target 5.3351
USD/CNY long 6.4248 to target 6.4575
USD/CZK long anywhere or 20.88 to target 21.43
USD/DKK long 6.1185 to target 6.1456
USD/HRK Long anywhere or 6.1864 to target 6.2289
USD/HUF Long anywhere or 292.10 to target 295.37
USD/MYR Short 4.1276 to target 4.1148.
USD/PLN Long Anywhere or 3.7308 to target 3.7597
USD/RON Long Anywhere or 4.0528 to target 4.0744
USD/RUB Long 73.92 and 73.85 to target 74.64
USD/TRY Short 8.4572 and 8.4748 to target 8.3513