The Fed provided an enormous opportunity for USD/EM as USD/EM followed DXY lower over the past 4 weeks and traded to oversold extremes. The FED furnished the trigger for USD/EM to trade from deeply oversold to current overbought extremes.
USD/PLN for example traveled 2000 pips higher from 3.6391 lows to current 3.8375. Significant to USD/PLN is the break above the 5 year average at 3.8004. On Fed announcement Wednesday, USD/PLN traveled from 3.7149 to 3.8464 or a 3 day total of 1300 pips.
USD/BRL traded a 1 day total of 1276 pips from 4.9819 to 5.1095. Significant to USD/BRL on a larger scale is the current close at 5.0071 is the result of 1.5297 lows in 2011 to 5.9690 highs in 2020.
A true currency price cycle trend is a duration of 9 years and USD/BRL achieved highs exactly on the 9th year. As the last remainder of a true independent currency due to BRL’s price negotiated daily by Brazilian banks rather than a standard Fix for all currencies, USD/BRL should now embark on a 9 year downtrend.
USD/BRL short, medium and longer term is massively overbought. Higher must break 5.2271. For the week, USD/BRL is massively oversold, unlike its overbought USD EM counterparts and should trade to easily 5.0737.
USD/CNY from the close at 6.4531 sits barely above vital 6.4446. USD/CNY for the week trades to 6.4753 then 6.4855 or drops below to easily 6.4344. On a longer term basis, USD/CNY trades fairly neutral without any consequential upside or downside surprises. Neutrality is the result of severe range compression experienced over the last year. USD/CNY once traded 5 and 1000 pip days only to now barely trade 400 pip weeks.
USD/DKK from the close at 6.2682 traded 6.1285 lows to 6.2779 highs in 2 days or 1400 pips. Along the price path, USD/DKK broke the 10 year average at 6.2360. USD/DKK is not only overbought but surpassed normal mathematical overbought boundaries and should trade easily to 6.1835 against caution at 6.2360.
USD/HRK, the Croatian Kuna traded from massive oversold at 6.1659 to 6.3332 highs in 3 days or 1600 pips and broke above the 10 year average at 6.2946. While overbought for the week, USD/HRK trades safely above 6.2946 and 6.2311. A break of 6.2946 targets easily 6.2684 from the close at 6.3240.
USD/HUF not only traded from 282.78 lows May 31 to 300.76 highs on Friday or 1700 pips but USD/HUF broke above the 5 year average at 286.53 then vital 293.37. USD/HUF trades overbought yet well above 5, 10 and 15 year averages. A good weekly target is 297.38 and should achieve easily.
USD/MYR achieved 500 pip highs in 3 days last week from 4.1156 to 4.1446. The 5 year average approaches at 4.1640. From the close at 4.1390, USD/MYR targets 4.1224 and significant downtrend exists on a break of 4.1150.
Never a big mover for USD/MYR however its significance serves as a complement currency to USD/RON as both exchange rates begin with the number 4 in much the same way as the number 6 to start USD/CNY, USD/DKK and USD/HRK. USD/DKK and USD/HRK are the better movers to USD/CNY and USD/RON to USD/MYR. Traded overall are decimal points to the right side of the number 4 and 6 for each currency pair.
USD/RON traded from oversold at 4.0134 May 31 to Friday highs at 4.1595 or 1400 pips. The majority of the move began last Wednesday at 4.0564 to 4.1595 or 1000 pips. USD/RON is not only massively overbought but extraordinarily overbought from Mathematical limits. Good target is located at 4.0844 and should achieve its destination easily.
USD/TRY achieved 8.7605 highs Friday from February 16 lows at 6.8928 and a 5 day total of 4600 pips from 8.2981 to 8.7605. Shorts to target 8.5980 is easily achievable. Longer term, USD/TRY sits at Richter Scale overbought and contains a long way to far lower targets at 7.0000’s.
USD/ZAR exists nothing special except a fairly neutral currency and trades safely above the 5 year average at 14.3538 from the close at 14.3943. USD/ZAR is oversold and contains potential to trade higher to 14.4816 then 14.5840.