Selected Interest Rates: A Summary

The key to all financial market prices to include exchange rates are interest rates. Interest rates today are dictated by respective national rates as many nations not only left libor but Libor is slated for elimination by end 2019. Every nation is now responsible for the price of their own financial instruments set by interest rates. USD interest rates by trading in its own markets for example prices USD exchange rates, stock indices, USD Gold and Silver and commodities priced in USD.

Every nation views and trades its own interest rates in a unique manner and this is why to report an overnight interest rate alone such as Europe’s Eonia is not enough to understand if interest rates overall are to high, to low, range or will trade to an intended target. A complement of national interest rates must be known in order to trade a respective nation’s financial instruments. Its a large body of knowledge yet interest rate trade to financial instruments is what the 1972 free float currency was intended.

Certain nations allow interest rate markets to move and Canada is the last holdout in relation to its counterpart nations while CHF interest rates trade in small channels.

BRL, SEK, NOK, MXN, ZAR and PLN normally trade in wide channels due to the wide channel prices of respective interest rates. Wide channel means the central banks force financial instruments to move. For INR, JPY, MYR, AUD, NZD trade in smaller channels while GBP is fast approaching interest rate trade in small channels. GBP matched CAD as the best open trade of interest rates but under Sonia changes, GBP, Brexit aside, is losing its status as consideration to open markets.

Viewed from the complement of interest rates per nation is actually the true yield curve as interest rates prices government securities. Interest rates also price FX Forward exchange rates.

An interest rate as it applies to financial instruments represents a support or resistance point and range trades as it applies to trade between interest rates. Trading interest rates to exchange rates and other financial instruments is the true manner to trade as all relevant information from support, resistance, target and range is known.

The key is to trade the correct financial instruments at the correct central banks interest rate release time otherwise traders will trade a non existent price. Certain central banks are wide open to view interest rates while other central banks are adept to hide interest rates. Certain central banks BOE and Sonia for example now force payment to receive interest rates. Smart traders understand how to price GBP in USD or another interest rate to maintain true GBP prices.

Every market price on the planet is highly influenced and complemented by USD interest rates. But its the world order to release times that allows USD to become pre eminent. After USD afternoon release times, NZD, AUD, JPY, CHF, GBP then EUR and CAD dominant the 24 hour market cycle. Afer NZD and AUD, all Asia nations then price interest rates from either NZD and AUD or straight from USD. What governs nations to either price in USD or NZD is times of trade in open markets and more importantly today is balance of trade between nations.

Historically, 3 month interest rate T Bills was predominant trade to finance governments in Hoover’s 1928 market crash then interest rates as known today began trade in the 1960’s.

Below is a partial list of the most vital interest rates in each nation and today’s rates. Most vital to the list as Libor eliminated is interest rates suffer severely from compression nation to nation. This means overall interest rate numbers per nation contain small distances and this compression solidifies low volatility price movements.

AUD. OCR 1.50 3 month 1.82. 3 month OIS 1.45.

NZD. OCR 1.75 3 month 1.88.

EUR. -0.368, 3 Month -0.314 or 0.632 and 0.686.

USD. Overnight 2.40, 3 Month Non Financial Commercial Paper 2.51. 3 Month Financial Commercial paper 2.60. 3 Month T Bills 2.41 and 3 Month Constant Maturity 2.46.

CAD. Corra 1.7375, Money Market Finance Rate 1.7484.

CHF. Saron -0.743. Call Money Rate, Tom Next -0.970. Debt Register Claims -0.781. 3 Month Libor -0.716.

Sweden. Repo Rates. Headline -0.25, 3 Month Stibor -0.024. Reference rate -0.50. Or 0.75, 0.976 and 0.50.

GBP. Overnight Sonia 0.705. 3 Month most vital Sonia and Repo rates by subscription.

Norway. Key Policy rate 0.75. Nowa Overnight Rate 0.74. 3 month T Bills 1.07.

JPY. Overnight Call Rates -0.059. Max traded 0.001, Minimum -0.086.

Brazil. Selic rate 6.50. DI rates 1 day 83.59. Brazil trades USD onshore and offshore interest rates as well as USD spreads, a true currency as intended from the 1972 free float.

MXN. Target Rate 8.25. Tie rate 91 day 8.52. 91 day Cetes rate 8.09.

ZAR. Sabor Repo Rate 6.74.

PLN. . Reference Rate 1.50. Deposit Rate 0.50.

INR. Policy Rate 6.25. Reverse Repo rate 6.00. Bank Rate 6.50.

MYR. Overnight Rate 3.25. 1 week rate 3.29. Bank Negara just instituted USD Swap rates.

 

Brian Twomey

 

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Weekly Trades Mar 17 – 22

 

This Week FX Trades  2311 Pips available, 13 Currency pairs in a perfectly traded Market. Last week + 2500 ish, 2 weeks ago 1768 pips.

NZDCAD was offered this week,  Here’s expected pips per pair for the week.

GBPJPY 274

GBPAUD 330

GBPCAD 321

GBPUSD 182

GBPCHF 131

GBPNZD 170

USDCAD 192

NZDCAD 127

EURUSD 85

EURAUD 37 and 75

EURNZD 139

EURCAD 64 and 66

CADJPY 217

USDJPY 102

 

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Brian Twomey

 

PETER WADKINS

I’m not only honored for my 15 year friendship with Peter Wadkins, now in his 46th year in FX but Peter begins a new chapter as his own FX Consulting company just formed. A website will materialize shortly. Not only is Peter’s FX and market knowledge extensive but Peter’s FX writings are clear, crisp, knowledgeable. Peter contains a certain style to deliver brilliant market messages for all to understand. As an independent and just retired from 12 years at Thomson Reuters writing, Peter will again deliver the most brilliant commentaries. I guess the word for me and Peter in days ahead is collaboration as Peter has known me, my writings, FX and other trades as well as a monitor to my own 16 years of FX growth.

Peter’s profile. https://www.linkedin.com/in/peter-wadkins-103a463/

 

 

 

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FX Realignment 2019

What was termed the “Flash Crash ” last week in actuality was a rarely seen, rarely known event that occurs every 10 years in FX markets known as Realignment. Realignment pertains specifically to FX cross pairs and involves an allegiance switch to and from underlying USD and Non USD anchor currency pairs.

Interest in the realignment topic derives from a 10,000 exchange rate study against deeply explained Regression Statistics between the 1998 and 2008 realignments and published in an academic journal under a double blind review. UBS is the only bank to ever devote words to this issue in post 2008 trading and not many words.

Previous Realignments since the 1972 free float transpired in 2008, 1998 and speculation to 1987. Year 2019 begins a new Realignment period to signify not only a new episodic cycle but fresh trends are upon us. Fresh trends in currency markets are highlighted for example by 10 year periods, 10 year trend trades such as EUR/USD at 1.6000 in 2008 to the 1.0300 bottom within a 9 year time frame.

The 500 pip drop last week led by EUR/JPY break at 124.13 was the message to markets to alert not only is Realignment upon us but shorts was the way upon the break. EUR/JPY as preeminent widely traded cross pair since year 2000 led the 1998, 2008 and now 2019 Realignment periods. EUR/JPY will lead the charge in markets moving forward as well as to adjust the previous 10 year Carry Trades and hedges. What worked in the past, won’t work in the future 10 years to new periodic markets.

Why the term Flash Crash under a sudden 500 pip drop is because previous 1987, 1998, and 2008 Realignments involved market implosions driven by an outside event. Wide swing Pip movements were easily explainable by the event. The current 2019 Realignment was driven by a specific point break, lacked any association to implosion and caught market traders completely off guard unless traders understood EUR/JPY’s significance to 124.13.

The side issue mentioned in my paper was the question does Realignment always involve a market crash or will Realignment signify by a specific point break and the years long awaited answer is for the first time since 1972, a point break is enough for a realignment. Quite a historic event.

Realignment must be viewed, statistically calculated and traded based on a 3 pair FX combination. The best example is seen in most widely traded EUR/USD, EUR/JPY and USD/JPY. Yet any 3 pair combinations work such as GBP/USD, GBP/JPY and USD/JPY or GBP/USD, GBP/CHF and USD/CHF.

Many aspects to Regression Statistics are available to not only explain Realignments but to see realignment coming as well as future trades miles in advance. Statistically and to explain simply, Cross pair realignment is a Correlation shift seen most specifically in Correlations, Co -variance and RHO as the confidence interval to Correlations.

EUR/JPY for example is seen a top and bottom to its association to EUR/USD and /or USD/JPY. EUR/JPY began its Correlation association to EUR/USD in 1998, switched to USD/JPY in 2008 and now will switch back again to EUR/USD for a 10 year duration until the next realignment.

Was the 500 pip move enough to declare the complete correlation change is yet unknown and under the assumption the change was not complete because prior full realignments took almost 1 year to finish. Traditional Correlation changes involves specific switches to either an exact pip or small range. Important is we are in the threshold to new trends.

EUR/USD and EUR/JPY Correlation associations will see greater market volatility as opposed to less volatility associated to EUR/JPY and USD/JPY. Greater volatility as EUR/USD and EUR/JPY is naturally by statistics built into exchange rate numbers to allow wider trading boundaries as opposed to the far less boundaries as EUR/JPY and USD/JPY. Market departments in central banks are responsible to assign exchange rate numbers.

The key moving forward is 10 year trends, 10 year duration against 10 year averages.

 

Brian Twomey,

 

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WTI: Levels, Ranges, Targets

WTI at its 45.84 close is exactly centered from low range points at 41.15 and 42.69 to its upper points at 49.59, 50.76 then comes the next average at 52.54 to travel higher to 53.62, 58.20, 60.28, 64.54 and 66.50.

WTI’ s current price is low, oversold and contains only one direction and that direction is up. Longs must trade to minimum 52.15 and 56.39 on a break at 52.54. Related to the concept I term the Statistical Price Path, a free trade and free money long is located from long at 41.15 and 42.69 to target and exit at 49.59.

Any price below 41.15 is an extra bonus for longs particularly 40.09. A 10 point trade for WTI must view as a fairly substantial move as ranges only allow point movements from 20 to 44 points.

At 44 points places WTI at 89.00 highs but 89.00 highs bumps against perfect shorts at extreme prices at 88.98, 86.01, 84.89 and 82.08. Further averages must break at 70.43, 73.75 and 74.45 to even consider WTI’s 80.00’s extremes. Overall ranges is located from 52.54 to 74.45. Any price above 74.00 won’t travel very far.

Conversely, October’s WTI high at 75 included a free money trade short to 72.68 and 64.54. A break of the downside averages was an extra bonus for shorts. Consider as well WTI dropped from 76.00 highs to 42.00 lows for 34 pips in 2 months. WTI ranges far more than trends and overall trading WTI must be done with perfect accuracy.

 

Brian Twomey

S & P’s: levels, Ranges, Targets

From S & P’s close at 2621.75 and written in Feb 11 post, the bullet points:

1. Extreme prices located from 2698.59 to 2988.25 and top is 2900.00. 2. S& P’s in dire need of correction due to extreme overbought from 2509.25 and lower averages.

3. Most vulnerable to break lower is 2509.25 then 2319.33 and 2226.73. 4. Current averages Peaked, higher price not justified.

5.Most immediate targets are located at 2648.45, 2542.31, 2454.13, 2391.50, 2351.47, 2312.33, 2262.46 and 2213.65. The averages to watch and most vulnerable to breaks are at 2509.25 and 2319.33. 6. Averages to hold from correction 2319.33 and 2316.87.

Here’s the 2351.10 S & P’s at 600 points lower, 2319.00 held, correction occurred, target at 2351.47 correctly called.

Its customary for financial market prices especially currencies to trade to extremes as did the S& P’s to 2900’s. The current drop is the result of extreme overbought as the only direction was lower to unwind overbought.

Not sure bear market commentary is warranted and from where as the S&P’s were 61.13 in Jan 1974, and 672.14 March 2009 and topped at 2941.86 in November 2018.

From current 2351.10 next major lower points are located at 2337.06 then 2258.53 and 2157.49. Above 2432.11, 2595.37 and 2725.55.

Overall range 2337.06 and 2258.53 Vs 2725.55. The best target above 2725.55 is located at 2866.53 to inform 2900’s to 3100’s will severely struggle as severe overbought begins again and good sell points.

To break 2725.55 overall will require most extreme to positive USD news, S& P terrific earnings news and another rate hike may not see 2725 crack.

Current S & P’ at 2351.10 is oversold and targets are located at 2412.30, 2428.92, 2479.17, 2521.30, 2567.41, 2584.57 and 2631.57.

Targets inform 2595.37 represents a tough break and the only target available above is 2631.57 to mean 2725 holds.

Failure to break 2595.37 means good sell point then to target 2521.30, 2479.17, 2428.92 and 2412.38.
Targets inform 2337.06 holds and 2595 represents tough break point as a 200 point or so trading range may be the norm for the next months.

Not only do I forecast and correctly hit currency targets but over many years, targets were correctly forecast to interest rates, yields, oil, commodities. As long as a number is attached, I correctly call it and all profit. Contact for signals if interested.

 

Brian Twomey

CHF Emerging Market Break Points

26 Total Currency Pairs, 4 contain range problems CHF/JPY, CHF/SEK, CHF/SGD, CHF/THB yet SGD and THB contained problems as USD/SGD, USD/THB and EUR/SGD and EUR/THB. Break Points below

CHF/BRL 3.8872

CHF/CAD 1.3328

CHF/CNY 6.9122

CHF/CZK 22.7365

CHF/DKK 6.5709

CHF/EUR 0.8806

CHF/GBP 0.7847

CHF/HUF 284.5350

CHF/IDR 14700.8930

CHF/ILS 3.7346

CHF/INR 71.7979

CHF/JPY 113.5200 Problem

CHF/KRW 1132.0854

CHF/MXN 20.0623

CHF/MYR 4.1826

CHF/NOK 8.5090

CHF/NZD 1.4836

CHF/PHP 53.4395

CHF/PLN 3.7822

CHF/RON 4.0994

CHF/RUB 66.6290

CHF/SEK 9.0828

CHF/SGD 1.3807

CHF/THB 33.0387

CHF/TRY 5.4381

CHF/ZAR 14.2272

 

JPY Emerging Market Break Points

 

21 JPY emerging market currency pairs and 12 contain range problems while 3 pairs EUR/JPY, AUD/JPY and CHF/JPY exist in G10 and CAD/JPY is on the edge with USD/CAD’s rise today. Break Points below and problem highlighted.

BRL/JPY 29.2333

CNY/JPY 16.4266 Problem

CZK/JPY 4.9933 Problem

DKK/JPY 17.2768 Problem

HUF/JPY 0.3990

IDR/JPY 0.0077

ILS/JPY 30.4005

INR/JPY 1.5817

KRW/JPY 0.1002 Problem

MXN/JPY 5.6618

MYR/JPY 27.1426 Problem

NOK/JPY 13.3455

PHP/JPY 2.1246

PLN/JPY 30.0163 Problem

RON/JPY 27.6927 Problem

RUB/JPY 1.7044 Problem

SEK/JPY 12.4992

SGD/JPY 82.2189 Problem

THB/JPY 3.4360 Problem

TRY/JPY 21.0050 Problem

ZAR/JPY 7.9885

 

 

G10 Break Points, USD and EUR Emerging Market Break Points

 

Problem Currency Pairs

 

G10 Currency Pair Problems
EUR/JPY remains problem pair 3rd week, range problem.
CAD/JPY remains, CHF/JPY, AUD/JPY and USD/CHF enters problem status,
EUR/CAD remains problem status and EUR/GBP leaves problem status. Pure USD driver this week.
AUD/JPY problem means AUD/USD driver. EUR/GBP leaves problem status means EUR/USD the driver.
CAD/JPY problem means USD/CAD the driver. USD/CHF problem and not CHF cross pairs means USD the driver.
CHF/JPY problem informs and always early warning to JPY cross pairs are mispriced and must move.
Notice USD/JPY not on the list. Note also reported last 6 weeks JPY cross pairs at neutrality. Neutrality is over and movement begins again.
USD/CAD more overbought than GBP/USD is oversold. Both are main drivers this week in overall currency markets.
                          G10 FX Break Points
Break points, carefully calculated MA’s, break above or below results in significant moves.
EUR/USD 1.1449 EUR/JPY 128.97 EUR/CHF 1.1361 EUR/CAD 1.5128 Problem pair
EUR/NZD 1.6850 EUR/AUD 1.5782, AUD/EUR 0.6337, Which decides AUD/USD EUR/GBP 0.8906
GBP/USD 1.2860 GBP/JPY 144.86 GBP/CHF 1.2758 
GBP/CAD 1.6981 GBP/NZD 1.8925 GBP/AUD 1.7723, Australia’s original pair,Pegged, dates to 1800’s
AUD/USD 0.7255 AUD/JPY 81.72 Problem pair, Noise issue AUD/CHF 0.7199 AUD/CAD 0.9582 AUD/NZD 1.0676
NZD/USD 0.6797 NZD/JPY 76.56 NZD/CHF 0.6744, now aligned sine last report to NZD/USD
NZD/CAD 0.8979
USD/CAD 1.3214 CAD/JPY 85.28 Problem pair CAD/CHF 0.7513
USD/CHF 0.9930 Problem CHF/JPY 113.53 Problem
USD/JPY 112.65 CAD/ZAR 10.65 Vs EUR/USD 1.1449, vital relationship in all currency markets
                                       USD and EUR Emerging Market Break Points
USD/BRL 3.8550, USD/CNY 6.8607 USD/CZK 22.57 USD/DKK 6.5229,
USD/HUF 282.49, USD/IDR 14598.86 USD/ILS 3.7054
USD/INR 71.33 USD/KRW 1123.59 USD/MXN 19.92 USD/MYR 4.1514 USD/NOK 8.4353
USD/PHP 53.01 USD/PLN 3.7555 USD/RON 4.0702
USD/RUB 66.0920 USD/SEK 9.0196 USD/SGD 1.3706
USD/THB 32.8000 USD/TRY 5.3965 USD/ZAR 14.1063
EUR EUR/BRL 4.4101 EUR/CNY 7.8473 EUR/CZK 25.8253 EUR/DKK 7.4610
EUR/HUF 323.1085 EUR/IDR 16700.7436 EUR/ILS 4.2383 EUR/INR 81.5993
EUR/KRW 1285.2968 EUR/MXN 22.7854 EUR/MYR 4.7486
EUR/NOK 9.6477 EUR/PHP 60.65 EUR/PLN 4.2955
EUR/RON 4.6556 EUR/RUB 75.5983 EUR/SEK 10.3172
EUR/SGD 1.5679 EUR/THB 37.5223 EUR/TRY 6.1725 EUR/ZAR 16.1341
                    Brian Twomey.  Trades Day, Weekly, Long Term available
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CHF as Market Protection

USD/CAD V CAD/CHF CHF as protection

Ex. GBP/USD below 1.2983 price went missing to its normal averages.

Brexit failure and GBP/USD fall bottom was found at GBP/CHF 1.2818.

GBP/CHF as protection stopped the risk pair’s further drop.

Same principle as EUR/CHF stops EUR/USD, NZD/CHF stops NZD/USD, AUD/CHF stops AUD/USD. CAD/CHF stops USD/CAD.

Without GBP/CHF 1.2818, GBP/USD would fell far lower to its own 1.2600’s.

GBP/CHF message was no way GBP/USD to fall further. Self contained is currency markets, understood by few. USD/CAD last post spoke to 1.3232 as weekly short point.

Fully factored above 1.3232 was ironically 1.3301 at the upper most extreme. Extremely rare day for any currency pair to trade at uppermost maximum.

Weekly since February, yesterday was 1st time USD/CAD went to furthest extreme for example. More intense overall is USD/USD went missing above 1.3081.

CAD/CHF below 0.7606 was written 0.7548 as normal target , fully factored at 0.7519.

CAD/CHF traded to 0.7461 and 58 pips from 0.7519. Extraordinarily rare to see such a day especially from CHF. Adjustment strategy requires hurry to range views to find bottoms, tops, entry, targets. Why is because CAD/CHF below 0.7566 also went missing, dangerous situation. Certain areas, prices are untouchable.

 

Brian Twomey

 

 

USD/CAD V CAD/CHF
Purpose of CHF in overall markets is protection, a dictatorship to dead stop a price rise or fall, to force ranges, trend changes, continuations, price rest zones, to command types of traded markets.
As currency pairs, CHF offers exact long / shorts levels or trade able zones.
GBP/CHF to GBP/USD we will stop at low 1.2800’s, got it.
USD/CHF is viewed as the Signal pair as every category of currency pairs offers a signal to the wider audience.
CHF/JPY is signal to JPY crosses as example. Then comes Loonie town as CAD/CHF 0.7604 is the exact opposite pair to USD/CAD, its protection to direction and target trend determination.
Both pairs are problems as price noise is astounding, means must move but to acceptable levels.
CAD/CHF high low break point 0.7606, USD/CAD 1.3094. Price noise to complete opposite pairs, more than a problem, its Loonie. USD/CAD multi week average located at this week 1.2970 coincides to CAD/CHF solid line at 0.7705. CAD/CHF longer range target is 0.7763 or USD/CAD 1.2881 but USD/CAD must break 1.2970 and CAD/CHF 0.7705. Tough order. Sell USD/CAD rises, long CAD/CHF drops, leave longer term alone until resolution. Watch USD/CAD 1.3163 and 1.3232, CAD/CHF below 0.7606 to 0.7577 and 0.7548.

 

Appropriations Committees and CHF Market Purpose

Republicans V Democrats,
2019 Appropriations Law passage contains one aspect, funding the law is quite another story.
All revenue bills, Budgets and Taxes, derive from the House Of Reps. This includes appropriations to all laws. Law passed today, signed by Trump to build the wall, must be funded by appropriations. No wall without funding.
Democrats control the House of Reps, budgets, Taxes and appropriations and its constitutional 1st stop to fund Government.
Trump’s roughest political challenges was nothing in 2018 as the Democrats will work overtime to overturn Trump’s policies.
The 2019 struggle will be seen in Appropriations Committees. Democrats will attempt to neutralize Trump by Amendments to Appropriation Laws slated to passage. Its the Democratic practice dating to Reagan and under all Republican Presidents.
Ex. In a well funded Defense Bill, Democrats will slip a Tax increase Amendment to the bill. Unsuspecting Trump or Republicans sign the bill then trouble as Dems with News Media assistance, cry foul to Trump’s Tax increase. Trump went against his word, can’t be trusted, he’s a loon, impeach.
Mind control as its best but George H.W Bush lost in 1992 by Dem Tax increase amendment. Trump’s to smart for this tactic. Money issues, funding is where action exists in 2019.
                                              USD/CHF and CHF Cross Pairs
USD/CHF Break Point 0.9947, break lower targets massive cluster at 0.9831, 0.9824 and 0.9807 then 0.9771.
From 0.9947 to 0.9831 = 116 pip t range. Above 0.9947 then trades 156 pip range from 0.9947 to 1.0103.
Traditional USD/CHF as dead currency pair so to allow cross pairs to perform the CHF work but also USD/CHF is the middle currency pair within the universe to all its dead range.
CHF/GBP = 0.7857, low man
CHF/EUR =0.8817
JPY/CHF = 0.8788
CHF/USD = 1.0060 Then big guys
CHF/CAD = 1.3354
CHF/AUD = 1.3865
CHF/NZD = 1.4714 highest
CHF/NZD currently untouchable even as complement trade to NZD/USD.
CHF/AUD Contains potential as both Complement trade to AUD/USD and long term target at 0.7500’s, or 1.3300’s.
CHF/USD is middle pair, caught between cross pair crossfire. Designed and structured purposeful in my estimation to protect USD/CHF.
CHF/GBP clearly low means higher for GBP/CHF.
CHF/EUR 0.8817 runs together against JPY/CHF at 0.8788. Fx Trades and FX assistance then contact
     Brian Twomey

 

FED FUNDS and 9 Year Currency Price Trends

Fed Funds Rate 1/92 to 10/18, or 26 years, Monthly averages 6.54 to 0.07, Mid 50% = 3.30, Current 2.25, So 26 years into Knut Wiksell’s 25 to 50 year neutrality Rate then 2.25 at 26 years is certainty low but not bad as we are on our way to normalization, no need to rush, let data decide. Trump is correct yet again, wait powell

 

EUR/UD, GBP/USD, USD/CNY and 9Y Currency Trend
Currency Price trends up and down are 9 years,
EURUSD 1.6028 to 1.0345 Bottom, Mid 1.3186,
Big Break today 1.2223. Took 9 years from 2008 to 2017 to drop 5683 pips or 631 pips per Yr from 1.6028 to 1.0345..
Then new 9 year uptrend began 2017 as current price rose 1100 pips already to 1.1400, slated to 1.2500 end Dec 2019.,
Drop 5683 v 1100 pip rise means far higher over next years.
GBPUSD 1.9862 to 1.1926 Bottom = Mid 1.5893 big break 1.4955, Took 8 years from 2008 to 2016 to drop 7936 pips, or 992 pips per year from 1.98 to 1.19.
At 1.2800, rose 900 pips, slated to 1.3900 by Dec 2019, miles higher to go as 7936 drop v 900 rise. USDCNY 8.0351 to 6.0406 bottom, Mid 7.0378. Took 9 years from 2005 Intro to 2014 to drop 1.9945 pips or 2216 pips per year. Now 6.9, rose 800 pips, miles higher to go. Extremely wide range currency cause China Repo rate nation, not interest rate, big difference, affords like SEK, NOK, ZAR, TRY, RUB, INR wide range currency price movements.
9 years on 50 market period scales ups and downs include corrections = 9, 18, 27, 36, 45, 47.5. 49.5. Valid? AUD/USD in 1920’s traded 2.9000’s, took 98 years for 0.7200’s. Shorter scale 9 years= 4.5, 2.25, 1.12, 5.6 months. See fibs, don;t look,

Currency Price

Trump, Impeachment, Indictment

Trump, Impeachment, Indictment
 To remain ahead to what’s coming.
The Office of Legal Counsel in Justice Dept updated in 2000 a 40 page paper on grounds for Impeachment and indictment for Presidents, updated since 1970’s and Nixon.
A sitting President cannot be indicted but yes to indictment after he leaves office. Indictment comes only if crimes were committed while in office and only if crimes, grounds and evidence truly exists.
Nixon forced a deeper view as reason why can’t indict is to not disintegrate the United States. The Democrats and Media know the 40 page rulings despite indictment talk.
House of Reps may vote impeachment but Senate Republican majority would never hold the necessary Trial then Impeachment vote. A yes vote to impeachment in House under Dem majority must contain grounds for yes majority vote otherwise vote not coming. Trump is clear and under no grounds for impeachment / Indictment.
Read podesta e mails and respectfully, Dems clear brilliant organizational attempt to take down Trump is obvious. Witch hunt is correct. Dems and Media are playing to future 18 to 40 voters as they are majority Dems. On trial is Capitalism V Communism and winner must emerge

 

EURIBOR, Interest Rates and EUR/USD

EURIBOR, FED FUNDS 3 month and USD

Hoover after the 1929 crash positioned for the first time government fund itself in the short term. T Bills were born and the most vital 3 month interest rate, a rate adopted by every nation on the planet and remains most important today.

Euribor’s slash to 5 maturities from 8 raised the top maturity by a few points and by osmosis the 3 month rate followed. In the last 3 weeks, Euribor 3 month ranged from -316 to -0.320 but settled between -0.318 to -0.320 since Dec 3rd official ECB changes.

-0.318 to -0.320 means 0.682 to 0.68. A higher negative means a lower rate as for example -0.321 = 0.679. and -0.315 = 0.685 Alternative is USD 3 month range from 2.41 to current 2.45 and appears far from Euribor but taken both from total interest averages USD at 1.0027 Vs Europe at 1.0108 then the range is actually 81 points and on the high side by at least 10 points. Tomorrow’s trading, either USD rises or Europe drops but USD is the leader and it decides while Europe and all nations follow. Yield V Yields is an erroneous indicator.

USD based on 2.45 means USD currency pairs at 3 month. USD/JPY 113.69, USD/CNH 6.9257, USD/ZAR 14.3770, USD/CAD 1.3456, USD/PLN 3.8147, USD/CHF 0.9964 USD/SGD 1.3787 USD/MXN 20.3075, XAU/USD 1247.34 USD/ILS 3.7614

EURIBOR V USD Interest Rates

Yesterday Europe Interest rates 1.0108 Vs USD 1.0027, Today 1.0114 Europe Vs 1.0022 USD, or 92 points, up 9 points from yesterday. Europe rose 6 while USD dropped 5 points.

3 month Europe today -0.316 Vs USD 2.41, a meaningless spread, no help to exchange rates, interest rates or any financial market price.

Reported yesterday USD/JPY 113.69, held, USD/CAD 1.3456 held, XAU/USD broke 1247 to 1249 then dropped to 1242.

Its impossible for the 3 month interest rate to ever leave markets. Highlighted here is trade market prices, exchange rates and pure interest rates by understanding interest rates.

No other way exists for 1 and possibly 2 day trades than by interest rates.

EUR/USD for example contains 2 sides, EUR and USD. 2 ways to view this relationship, by Europe and USD interest rates or by pure USD interest rates alone since USD dominates all market prices, by all, this includes commodities, yields, stock markets. Interest rates offer targets, ranges and trade able levels in between. Far easier to understand interest rates and especially currency trades.

EURIBOR, USD, EUR and Draghi

1st lesson to exchange rate trading to yesterday’s 1.0114 and USD 1.0027 interest rates is day trade levels, ranges and targets were known 24 hours prior and no mysteries exist to today’s trade.

Draghi knows quite well today’s levels, ranges, targets. The EUR will trade to its levels, ranges and targets no matter what Draghi says. Draghi is especially irrelevant to longer term target trades. His words either allow trades to progress or hit targets or a currency pair trades against targets in which case, add a lot, wait to target but overall to add a lot means Draghi offered a market gift against extra profits.

EUR/USD is going miles higher, this we know. Sorry but Draghi’s self indulgent importance factors to irrelevance especially in these new days of controlled exchange rates by killing interest rates. Draghi can release bombshell news, still EUR may travel 100 pips and in 1 direction. I’ll demonstrate. EUR/USD bottoms 1.1306, 1.1307, 1.1313, Tops 1.1420, 1.1427 and 1.1433. Big break point 1.1457 for higher or big reverse. EUR/JPY Bottoms 128.28 and 128.36, Tops 129.59, 129.66, 129.73, Big break point for higher or reverse 128.97. EUR/AUD Bottoms. 1.5623 and 1.5633, Tops 1.5787, 1.5781, 1.5800. Big break Point 1.5778,

Euribor, USD, EUR/USD, EUR/GBP

Euribor today and next 24 hours 1.0115 Vs USD 1.0028. The comedy central of exchange rates not only continues but a reflection of new structural changes and here to stay since 2014 study and 2016 introduction. Note all trading life begins at parity.

As written much, forecasting and day trading became a new game as the old methods no longer counts. Trading platforms however can’t ever change as they are wired to interest rates.

Highlighted yesterday as EUR/USD and EUR cross pair ranges and all ranges held through draghi. Despite bombshell No QE, growth to the downside, EUR/USD ranged 60 pips and not even 1 direction. EUR/GBP roamed 50 pips.

What’s EUR/GBP , its USD/EUR or opposite pair to EUR/USD. Pre interest rate changes on Draghi remarks 100 to 150 pips.

Next 24 hours USD/EUR = 0.8764, 0.8783, 0.8797, 0.8820, 0.8834. Translated to EUR/USD = 1.1319, 1.1337, 1.1367, 1.1385, 1.1410. EUR/USD= set by ECB wide. 1.1222, 1.1289, 1.1294, 1.1415, 1.1483.

Translated to USD/EUR = 0.8911, 0.8858, 0.8854, 0.8760, 0.8709. EUR/USD break Point for higher, or reversal 1.1452. Do we now better understand exchange rates and trading. This not seen in print

Brian Twomey  Trades available contact brian@btwomey.com

 

EUR/USD January and 2019 Seasonal

EUR/USD, EUR/GBP, January Seasonals
Yesterday’s 60 pip move from EUR/USD and wide rangers EUR/AUD and EUR/NZD informs not only is EUR/USD driver to cross pairs but a small 60 pip move on bombshell growth announcements should’ve seen a larger range.
EUR/USD is deeply entangled to USD/EUR and USD pair EUR/GBP. This USD V EUR relationship must break to see wider EUR/USD moves.
USD is the driver but overall in Q3, the G10 in USD V Non USD as drivers to cross pairs are correct historically in currency markets.
EUR/USD January seasonal works as overall since 1999 to 12 down months V 8 up months. 12 down months avg is 294 Vs 285 avg up months. For 2008 to 2018 works as 5 down months V 6 up months with 339 avg for down months V 294 avg up months.
From 1999 to 2008 saw 7 down months at a 262 avg V 3 up months at a 263 avg. For 2008 to 2018 saw a more highly neutral EUR/USD compared to overall 1999 to 2018 and 1999 to 2008.
    Brian Twomey contact btwomey.com
    My trusted friend, http://tantalumwatches.com  exquisite top brand name Watches, #watches, Pocket Watches, Rings, luxurious, please have a look, Brian Twomey

 

WEEKLY Trades DEC 3 to 7

 

12 Weekly Trades, see perfection to near perfection to entry, exit, target. Normally 2 way prices offered to allow continuous trades all week  but not this week as many prices are to low or to high. We trade for profit, not trade for gambles. Please visit trusted friend’s site at posy end. Brian Twomey, Contact for trades

 

                            Best trades this week are again GBP and as long as GBP pairs remain at current lower levels then GBP will remain on weekly priority list. GBP/USD, GBP/CAD, GBP/CHF and GBP/JPY. Next favored trades are USD/CAD, EUR/USD and EUR/CHF. Least favored trades are EUR/CAD, EUR/AUD and EUR/NZD.
GBP/USD break Point 1.2953, above 1.3101, 1.3262, 1.3305 and eventually 1.3822.
Strategy. Any price below 1.2953 is fair game for longs as GBP/USD must trade back to 1.2953 and higher. Long 1.2680 and 1.2719 to target 1.2932, Must break 1.2825 and 1.2878. The break at 1.2953 then target becomes 1.3107.
GBP/CAD Break point 1.7032, above targets 1.7127, 1.7222 and 1.7317.Overall GBP/CAD must trade to minimum 1.7061.
Strategy. Any price below 1.6942 is fair game for longs. Caution at 1.7074 for longs above 1.7032 as this line must break to target next at 1.7127 then 1.7222. Long 1.6865 and 1.6842 to target 1.6984 and a must break to then challenge 1.7032. Long
GBP/CHF Any price below 1.2798 is fair game for longs. Break point 1.2873, above targets 1.2979, 1.3036, 1.3193 and eventual must trade to 1.3270.
Strategy. Long 1.2684 and 1.2711 to target 1.2838. Must break 1.2838 to challenge 1.2873 to then target 1.2979.
GBP/JPY Any price below 144.18 is fair game for longs. Break Point 145.78, above targets 146.37, 146.97, 147.59 and eventual must trade to 148.67.
Strategy. Long 143.94 and 144.25 to target 145.47. Caution 145.47 as this is must break point to challenge 145.78 then target 146.37 and 146.97. Caution also at 146.82 as this line may not break this week but serves as good short point to target 146.37 and 145.98.
EUR/USD Break Point 1.1463, above caution at must breaks for higher at 1.1459 and 1.1507. Above 1.1507 then targets 1.1593, 1.1659 and eventual 1.1705.
Strategy. Any price below 1.1349 is fair game for longs as any price below must trade back to at least 1.1349 and higher. Long 1.1203, 1.1235 and 1.1268 to target 1.1401 and 1.1432. Caution 1.1401 must break to challenge 1.1463 then higher.
EUR/CHF Break Point 1.1392, above targets 1.1471, 1.1551 and 1.1631. Below, severe caution at 1.1292 and 1.1249 vital break points.
Strategy. Longs must break 1.1304 and 1.1309 to trade higher. Long 1.1270 to target above 1.1309 to 1.1377. Above 1.1392 then targets 1.1471 and 1.1511.
USD/CAD break Point 1.3151, below targets 1.3057, 1.2963, 1.2869 and eventual 1.2699.
Strategy. Any price above 1.3151 is fair game for shorts. Short 1.1339 and 1.3386 to target 1.3198 and 1.3174. Must break 1.3245.
EUR/CAD Break Point 1.5074, above targets 1.5170. Below caution at lines 1.4957 and 1.4939.
Strategy. Any price above 1.5170 is fair game for shorts as target at 1.4851 must break 1.4957 and 1.4939. Short 1.5170, 1.5189 and 1.5228 to target break at 1.5074 then 1.4997.
EUR/AUD Break point 1.5769, above targets 1.5912 and 1.6055.
Strategy. Long 1.5395 and 1.5422 to target 1.5554 and 1.5604.
EUR/NZD Break Point 1.6954.
Strategy. Long 1.6377 to target 1.6521 and 1.6593.
                                NZD/CAD
Break Point 0.8895, below targets 0.8759 , 0.8719 and 0.8623.
 
Strategy Any price above 0.9161 is fair game for shorts. Caution shorts at must break points for lower at 0.8973 and 0.8914. Short 0.9167, 0.9201 and 0.9235 to target 0.8948 however 0.8973 must break therefore exit just short at 0.9002. A break at 0.8973 then targets 0.8914. Must cross below points 0.9134, 0.9104 and 0.9038. 
NZD/USD
 
 Break Point 0.6763.
 
Strategy. 0.6911 and 0.6914  reside just above and a break higher at 0.6911 targets 0.6976 and 0.7011. Cautious shorts at 0.6905 to target 0.6809 and 0.6799. Must break below 0.6834 then target 0.6809. 
   Brian Twomey
   My trusted friend, http://tantalumwatches.com  exquisite top brand name Watches, #watches, Pocket Watches, Rings, luxurious, please have a look, Brian Twomey

EUR/USD and Trade Service

 

The vast majority of writings over last months were posted on Linked IN to 2300 high quality followers and many many great topics on interest rates, trades, retail loses, interest rates as benchmarks to long term trades, USD V EUR deviation, Q Vs Q trades and Currency markets, ECB’s slash from 8 Euribor maturities to now 5 and implications, definition of a currency price, Fed Funds rate 25 year averages, Knut Wiksell Neutral interest rates.

The actionable and profitable money topics to markets and trades are many to bring a true comprehension to prices and present conditions must be addressed but me as a standalone doing my own research, can’t cover all the necessary topics. Today’s most ridiculous topic is inverted yield curves and recession ahead and wrong as usual to believe inverted when interest rate averages are well secured.

Then the question becomes why bother as traders, trade services and currency analysts devolved into a herd mentality. Analysis, trades and current market topics remain the same from person to person, bank to bank, trade service to trade service, website to website. I respect many at Fx street but contributor analysis and trades aren’t worth the paper its written on. Its the same old story, I’m a 1 man operation doing much work and its difficult to break through the crowds especially when we live on the assumptions goldman sachs says therefore its absolute.

Yet how useful is it to engage in such topics. Did any market topic, central bank meeting, economic announcement have any bearing on The EUR/AUD trade from 1.6300’s to 1.5600’s and a 2 month duration. This and many other longer term trades informs the market topics are the biggest crock of stuff ever foisted on the trading public. Now try and sell this concept to the trading public and most won’t bother reading.

So 2300 followers and 2000 + views now per writing, the result is more and more are flocking to my writings including banks and hedge funds I never knew existed, graduate students, professors, researchers.

The trade service is running and we are all very profitable week after week. Trades are now offered as daily, weekly and longer term, defined as 3 to 5 and 800+ pip trades. Many come and remain for long periods. Weekly trades are the standard 10 currency pairs, USD/CAD, EUR/USD, GBP/USD, GBP/JPY, EUR/CAD, EUR/NZD, EUR/AUD, GBP/CHF, EUR/CHF and GBP/CAD.

Included when ready were NZD/USD, NZD/CAD and others. Daily trades are sent twice daily and are interest rate based trades. Contact if interested,

 

Brian Twomey, btwomey.com, brian@btwomey.com

 

 

EUR/USD, G10 and Overall Currency Market Conditions.

Common themes to Currency market prices is the extreme divide between EUR, GBP, AUD, NZD Vs USD counterparts USD/CAD, USD/JPY and signal pair to JPY crosses, CHF/JPY. Currency Pair CHF/JPY is a USD pair and its purpose in the 28 major pair universe serves as insight to USD/JPY as the counter balance and same exact pair, insight to USD, insight to USD/CHF and insight to all JPY cross pairs.

Currency CHF/JPY sits dead neutral and now ranges from its 117.00 drop to current 112.00’s. The insight to CHF/JPY informs JPY cross pairs also trade at far extremes from EUR/JPY and GBP/JPY to counterparts CAD/JPY, AUD/JPY and NZD/JPY. Insights and trades were clear January to March / April as USD/JPY traded far lower than CHF/JPY then marriages and crossovers occurred. USD/JPY and CHF/JPY are currently in treacherous marriage mode.

Pairs EUR/JPY and GBP/JPY should trade miles lower as proper positions, counterparts higher but the extreme divide between USD and NON USD forces JPY cross pairs into neutrality as all are caught in the cross fire. CHF/JPY further informs USD/CHF sits at its traditional dead center position and smart for the SNB to allow equilibrium while the major pair extremes resolves itself and resolution means many months ahead rather than weeks. This means a stand alone trade in CHF crosses also retains dominance as minor range trades rather than trends. This includes CHF/JPY.

EUR/USD 1.1300’s, GBP/USD 1.2800’s, AUD/USD 0.7000’s, NZD/USD 0.6500’s retain positions as extreme lows and should trade easily 300 to 400 pips higher to declare normal currency markets within normalized ranges while USD/CAD 1.3100, USD/JPY 113.00 trade at extreme nadir and should trade miles lower.

USD pairs higher and non USD pairs lower only adds to an already deeply traded divide in currency market prices brought upon markets since the Mar / April period and FED interest rate raises. AUD and NZD were already off track by 300 and 400 pips but EUR and GBP lower ensured both pairs would remain lower for longer.

A meeting at the center is desperately required to see more normalized and wider ranges and lasting trends with purpose and meaning. Current trades at extreme divides lack description as trades or smart but more accurately reflects a dangerous and pure speculative trade. Currency pair choice and trade selection remains extraordinarily vital in the current divided environment. Best for daily and weekly trades to view wider range pairs until extreme divide rectifies itself and better trades materialize.

The central bank question is answer the FED call and raise interest rates to allow higher currency prices and obvious meeting at the equilibrium center or retain a lower and expensive currency price for export purposes at the expense of national GDP. Not sure Export to GFP correlation nor exchange rate equilibrium until data is seen but CAD/USD at 0.7631 may soon provide an answer against the BOC’s latest raise.

While overall USD Vs Non USD trade at exorbitant extremes, cross pair non compliance and caught in the cross fire forces a slow path to normalcy and the desperately needed position to the center.

Longs in EUR/USD, EUR/CHF and EUR/CAD are offset by shorts in EUR/JPY, EUR/NZD, EUR/AUD and EUR/GBP. Both EUR/JPY and EUR/CAD are fast moving and are dangerous close to perfect mathematical neutrality while EUR/CHF lacks ability outside a 100 pip range. EUR/USD lives on its own in the basement.

USD/CAD’s wider ranges are offset by dead ranges in CAD/JPY and CAD/CHF. Brexit and USD extremes are clearly seen in GBP/USD as current 1.4990 is the driver price and down from 1.5600’s at Brexit announcement.

Higher GBP to 1.3900 target can only materialize upon a Brexit and USD resolution. Meanwhile GBP/CAD is driven by USD/CAD while GBP/NZD and GBP/AUD are heading lower and driven by AUD/USD and NZD/USD, GBP/JPY retains neutrality and GBP/CHF lacks a significant range.

The most significant long trade is NZD/USD and any pairs with NZD in first position as NZD/USD alone targets multiple 100’s of pips higher.The least significant shorts are USD/CHF and USD/JPY but best is USD/CAD.

Currency market prices are in deep disarray and lack any resemblance to uniformity. Prior currency market periods experienced such USD V Non deep divides before and corrected more quickly as past periods allowed for far wider price movements. As range compression and slower price movements became the new order under the 2016 interest rate reforms, correction to the current chaos could take easily 6 months or more.

To a more distant divide in USD V Non is the question of results to an outside event such as war, terrorist attack, political calamity, an Iranian missile, troops at the border. Such an outside event would experience a 500 pip move faster than the eye could blink. Between the dangerous overall currency market structure and the political/ war scenario, deep caution is warranted.

EUR/USD. Break pont 1.1589.

GBP/USD break Point 13105.

GBP/JPY 146.43.

CHF/JPY 113.10.

EUR/JPY 129.50.

USD/JPY 111.76

 

Brian Twomey. For FX trades and assistance, contact.

My trusted friend, http://tantalumwatches.com  exquisite top brand name Watches, #watches, Pocket Watches, Rings, luxurious, please have a look, Brian Twomey

EUR/USD, EUR/JPY, USD/JPY and Realignment

The topic of rarely seen currency market Realignment was addressed before but EUR/JPY contains its best shot to break below 124.06 and force Realignment. Why EUR/JPY is because its most widely traded, it contains, as most currency pairs, 2 opposites and because currency markets are defined by cross pairs as many more exist than the 7 major pairs. Further, Cross pairs actually and traditionally run and define currency markets.

For 28 major currency pairs to include the USD V Non USD majors then 376 combinations exist. Subtract for example EUR/USD and USD/EUR then 14 pairs from the majors must subtract from 376 to define total currency market cross pairs as 362 cross pairs.

Realignment is defined periodically as a shift in currency pair focus every 10 to 12 years within any 50 year market period. From 1998 to 2008, EUR and risk on defined the period as EUR/USD climbed from 1.0000’s to 1.3900 and EUR/JPY from 110.00 to 169.00. USD/JPY traded at 110.00’s. Realigment hit in 2008 and EUR/USD dropped from 1.3900 to 1.0300, USD/JPY to 124.00 and EUR/JPY traded alongside USD/JPY but above 10 year averages.

Realignment is a correlational shift from cross pairs to major pairs and cross pairs define the shift. Realignment can only be seen from cross pairs. EUR/USD trades below its 10 year average at 1.2600’s, EUR/JPY above at 124.06 and USD/JPY above at 99.00. EUR/USD not only lost its association to EUR/JPY but it lost its correlational association as well. EUR/JPY and USD/JPY above both 10 year averages means both share correlational associations.

EUR/JPY and USD/JPY above 10 year averages and EUR/USD below define the 2008 to current period as USD dominant. Traditional USD dominant periods experience less volatility, bout 500 to 1000 pips while EUR/JPY correlational attachment to its rightful owner EUR/USD experiences higher volatility, bout 1000 pips higher. See 2015 EUR/JPY, USD/JPY, EUR/USD academic paper and Residual plots for a picture to pip boundaries from 1998 to 2008 and 2008 to 2015.

EUR/USD as the major pair must include to any realignment because Europe and the United States are complete opposite political and economic systems in yields, interest rates and economic prosperity. One side wins as the other side loses. But currency pairs are also opposites and again only one side can win while the other loses.
EUR/JPY must drop below 124.06 then realignment is upon us. The current USD dominant currency market is 10 years old and its a matter of time before the market realigns and shifts.

Realignment means easily 1000 pip currency markets to re normalize prices in relation to 10 Y averages. 1000 pips means EUR/USD to 1.2600, GBP/USD to 1.3900’s, AUD/USD to 0.7800’s, NZD/USD to 0.7500, USD/JPY to 97.00, USD/CAD to 1.1400’s and the list goes on.

Realignment means long and short trades to last for years. Traders can transform from trader to long term investor. Trades are long term in relation to 10 year averages. The shift means cross pairs realign to major counterparts. Throw a dart at a currency pair then go long or short for a year or 2.

Trump is viewed as the catalyst because he’s normalizing a 30 year out of control political system. All nations will and are currently following Trump to normalization.

Free float now year 46, at 50 current period must end. its biblical leviticus 25, jubilee at 49 Y. EUR/JPY below 124.06 also means the last hurrah for currency trading as a complete new method will dominate the next 10 years. Happened every time since BOE 1694 creation.

 

Brian Twomey