AUD/EUR and EUR/AUD: Levels, Ranges, Targets

AUD/EUR followed by EUR/AUD.   At 0.6371 was close for AUD/EUR and EUR/AUD trades currently 1.5696

80 day = 0.6478 = 1.5436

Special Average = 0.6464 = 1.5470

334 day = 0.6786 = 1.4736

591 day = 0.6735 = 1.4847

846 day = 0.6757 = 1.4799

1101 day = 0.6764 = 1.4784

1279 day = 5Y = 0.6842 = 1.4615

1356 day = 0.6905 = 1.4482

1613 day = 0.7077 = 1.2975

1871 day = 0.7119 = 1.4046

2128 day = 0.7073 = 1.4138

2383 day = 0.6902 = 1.4488

2562 day = 10Y = 0.6832 = 1.4637

2639 day = 0.6809 = 1.4686

2894 day = 0.6747 = 1.4821

3150 day = 0.6690 = 1.4947

3408 day = 6642 = 1.5055

3590 = 14Y = 0.6605 = 1.5140

3665 day = 0.6595 = 1.5163

3920 day = 0.6535 = 1.5302

4174 day = 0.6490 = 1.5408

4429 day = 0.6452 = 1.5499

4685 day = 0.6445 = 1.5515

4899 day = 0.6427 = 1.5559

 

Brian Twomey

 

 

 

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NZD/USD and Technical Analysis: Levels, Ranges, Targets

If I present the MA views Vertical or up and down then the picture is clear, Horizontal or left to right then it appears not as clear. If I present for example 5 or 6 vital break points Horizontally then it appears possibly as information overload. What if Horizontal lines were drawn against or inside the Vertical lines as possibly many long term mid points or mid points between averages. My preference by fact and years of tests is mid points between averages because longer term mid points begins to impede on Fibonacci and Fibonacci Vs Moving average statistics are miles apart. Never was nor ever will I become enamored with Fibonacci because the numbers are wrong and off especially as it pertain to target trading.

Why the vertical view in my estimation is dominant is because we think of exchange rates as moving up and down rather than left to right yet the Vertical view is as much correct as the Horizontal especially as either view contains 18 years of moving averages.

Most specifically and not understood in exchange rate trading is currency prices are deeply in love with extreme points. Extreme points in my daily trades for 3 years are interest rate extremes but Moving averages are as much attractors to a price. A price must trade to its next point and if the level happens to be extreme then its quite normal.

Why this article and depth is because I’m in the process to draw interest rate lines to match a picture to a daily trade and overall this is quite an excursion especially to match exact points from currency pair to currency pair. The target aspect is easy but location is the key. As usual, I’m miles ahead of the crowds respectfully.

Notice the break of 0.7487 at the 5 year average and note how prices then trade in the center of the 18 year view. Luckily for the 5, 10 and 14 year averages then we see 4 quadrants based on 18 years of moving averages. If a price trades to the center then the drop will travel quite far. Alternatively, if price trades at its low extremes at 0.6900’s to 0.6700’s and 0.6600 then a far distance exists to trade higher. Traders want 0.7487 to break as multi month or even multi year trades exist. At 0.7648 is top in the center and NZD won’t trade above otherwise its out of range and a free trade would present itself.

For NZD/USD to reach the crucial center above 0.7487 then 6 break points exist, 0.7379, 0.7413, 0.7425, 0.7427, 0.7433 and 0.7487. Note EUR/USD contains 6 break points to reach its center trade levels above 1.2800’s. Currency pairs are exactly the same to each other as the names of pairs and exchange rate numbers are quite meaningless as most important is location.

Why location is because economic announcements are all the same nation to nation. Currently GDP for example is slated to travel higher in all nations. A time will come when this reverses and all nations report lower GDP. So tightly wound are exchange rates to each other. View other economic releases and see its all the same as the current world outlook is good. But note how a vast majority of currency pair prices are located near the center while non USD pairs at the bottom. The relationship is bottom quadrant to center and broken down by 4 quadrants  or 4 locations.

What melds the system of exchange rates and economic announcements together is interest rates between and among nations as all  trade at pretty much 1.50. NZD is 1.75 but the difference between 1.50 and 1.75 is extremely small and hardly registers.

Ask this question. Is NZD rising and USD falling. How is this question assessed in cross pairs such as EUR/CAD. Only one side of a cross pair is a dominant driver.

0.7648 tops to lows at 0.6657 mid point is 0.7152. At 0.7487 at the 5 year average to 0.7026 lows mid point is 0.7256. At 0.7425 at the 10Y to 0.7026 mid point is 0.7225. At 0.7279 and 14Y to 0.7026 mid point is 0.7152. At 0.7487 to 0.7279 mid equals 0.7383.

Lower for NZD must break 0.7231. For the week, 0.7341, 0.7379, 0.7413, 0.7425, 0.7427, 0.7433 and 0.7487.

80 day = 0.7074

Special average = 0.7231

334 day = 0.7124

591 day = 0.7026

846 day = 0.7076

1101 day = 0.7379

1279 = 5Y = 0.7487

1356 day = 0.7533

1613 day = 0.7609

1871 day = 0.7648

2128 day = 0.7588

2383 day = 0.7427

2562 day = 10Y = 0.7425

2639 day = 0.7433

2894 day = 0.7413

3150 day = 0.7341

3408 day = 0.7320

3590 day = 14Y = 0.7279

3665 day = 0.7264

3920 day = 0.7155

4174 day = 0.6994

4429 day = 0.6833

4685 day = 0.6718

4899 day = 0.6657.

 

Brian Twomey

 

 

 

 

EUR/JPY: Levels, Ranges, Targets

 

From 133.78 to lowest lows at 122.98, Mid point is located at 128.38. From 133.78 to 130.59 at the 5 year average, Mid point is located at 132.18. From 133.78 to 126.04 at the 10 year, mid point is located at 129.91.

80 day = 133.78

Special average = 133.39

334 day = 126.56

592 day = 124.76

847 day = 128.35

1102 day = 130.81

1279 day = 5Y = 130.59

1357 day = 129.54

1613 day = 125.19

1872 day = 123.40

2129 day = 122.98

2384 day = 123.59

2562 day = 10Y = 126.04

2640 day = 127.08

2894 day = 129.91

3150 day = 131.05

3409 day = 131.46

3590 day = 14Y = 131.57

3665 day = 131.57

3921 day = 131.45

4175 day = 130.50

4429 day = 129.11

4686 day = 17.58

4899 day = 127.45

 

Brian Twomey

GBP/JPY: Levels, Ranges, Targets

 

Friends, readers and followers are invited to understand and view short to long term currency markets from the EUR/USD and CAD/ZAR perspective from 3 months to 1953 or 65 years. Most important relationship in all traded markets is EUR/USD V CAD/ZAR.

Wide ranges are seen in GBP/USD and GBP/JPY and wide ranges is defined at 10 pips higher than EUR/USD and EUR/JPY. The laggard pair is USD/JPY at 20 pips lower which means GBP/USD and GBP/JPY are performing the work to USD/JPY.

The only location short term where GBP/JPY is seen as far to low is viewed in 2016 or roughly a 2 year average. From 2018 to 2009, GBP/JPY is correctly positioned middle range in relation to GBP/USD and USD/JPY. A crossover is threatened in 2010 and 2009 while 2007 is also viewed where GBP/JPY is much to low and needs to travel higher. Dated to Feb 1999, GBP/JPY price is low and out of range.

Most important pair to GBP/USD and the BOE is GBP/JPY as GBP/JPY must be contained in order to hold GBP/USD to desired exchange rate levels. Therefore its imperative for the BOE to maintain GBP/USD correlations to GBP/JPY or GBP/USD trades against desired levels.

From 144.56 lows to upper most 172.46 highs, Mid point is located at 158.51. At 158.51 is above the 10 year average at 152.45. From 144.56 to 152.45, Mid point is located at 148.50. Current GBP/JPY trades at lowest points in its 18 year range.

To travel higher, 150.46 and 150.63 must break to target first 151.25 at the 80 day. Next above break is 149.16 and 149.38.At 144 is a severely misplaced average but overall GBP/JPY averages lack uniformity.

80 day = 151.25

Special average = 150.46

Close = 149.10

335 day = 144.56

Close = 149.10

593 day = 149.38

848 day = 160.11

1103 day = 162.53

1279 day = 5Y = 161.00

1357 day = 159.60

1614 day = 154.04

1873 day = 150.63

Close = 149.10

2130 = 149.16

2385 day = 148.80

2562 day = 10Y = 152.45

2640 day = 154.50

2894 day = 161.59

3151 day = 165.60

3410 day = 168.10

3590 day = 14Y = 169.65

3667 day = 170.07

3922 day = 171.38

4175 day = 172.23

4429 day = 172.18

4687 day = 171.77

4899 day = 172.46

 

Brian Twomey

 

 

 

USD/JPY: Levels, Ranges, Targets

 

Upper most point at 113.97 to lowest at 98.51, mid point 106.24 and 109.58 at the 5Y average to 98.96 at the 10Y mid point is located at 104.27. At 106.00’s are 3 levels at 106.62, 106.20 and 106.18 then comes 105.40 and 104.10. Above, must breaks are located at 108.20, 109.58 and 109.78 while most vital in this list is 109.58 at the 5 year average. To see any chance higher, the special average at 109.78 must break and 109.58 and 109.78 overall provide massive resistance. Consistent to EUR/USD, averages in USD/JPY lack uniformity as crossovers occurred along the way in this 18 year view dated to Jan 1999.

At 106.00’s is 300 pips above from the 5 year average at 109.58 and 300 pips below to the 14 year average at 103.01. At 103, USD/JPY is massively oversold and at 109.58 reveals a downtrend underway. Shorter averages from 5 to 253 days reveal USD/JPY is massively oversold from 107.00’s to 111.00’s. Most oversold and at Richter Scale proportions is 109.00’s to 111.00’s.

Despite oversold and proximity to break points, USD/JPY inside price is fairly balanced as it relates to its averages and consistent with EUR/USD’s price to inform balanced trading rather than massive spikes especially as EUR/JPY from a monthly, 3 month and 1 year  perspective is positioned middle range to EUR/USD and USD/JPY. Further to positions, year 2007 is the point seen where EUR/JPY trades far to low in relation to USD/JPY and EUR/USD.

EUR/JPY at current  is a far to low price and must provide guidance. EUR/USD trades at upper range points to 1.2800’s while USD/JPY trades at bottom ranges. Addressed was a balance price in terms of averages but 106.27 at the close is at bottoms due to dangerously low.

80 day = 111.67

Special average = 109.78

335 day = 111.90

593 day = 111.31

848 day = 113.97

1103 day = 111.43

1279 day = 5Y = 109.58

1357 day = 108.20

Close 106.27

1614 day = 103.55

1873 day = 100.38

2130 day = 99.00

2385 day = 98.51

2562 day = 10Y= 98.96

2640 day = 99.29

2894 day = 101.00

3151 day = 102.26

3410 day = 102.67

3590 day = 14Y = 103.01

3667 day = 103.11

3922 day = 104.10

4175 day = 105.40

4429 day = 106.18

4687 day = 106.20

4899 day = 106.62

 

Brian Twomey

 

GBP/USD: Levels, Ranges, Targets

 

GBP/USD  still suffers from the 3000 pip Brexit drop yet GBP/USD retains its uniformity in all averages. From 1.2921 lows to average highs at 1.6412, mid point is located at 1.4665. From 1.2921 to the 5 year average at 1.4714, Mid point is located at 1.3817. The GBP/USD price is far to high from a short term trading perspective. Long term, GBP has potential to rise significantly. Rise significantly may require the BOE to raise Bank rate. But how high. As GBP remains low and at current levels, averages will drop significantly.

Lower for GBP/USD, must break 1.3710 while 1.4005 remains a crucial break. Above, 1.4597, 1.4714 and 1.4786 represent solid and tough levels to break.

80 day = 1.3549

Special Average = 1.3710

335 day = 1.2921

593 day = 1.3404

848 day = 1.4005

Close 1.4033

1103 day = 1.4597

1279 day = 5 Y = 1.4714

1357 day = 1.4786

1614 day = 1.4946

1873 day = 1.5097

2130 day = 1.5154

2385 day = 1.5185

2562 day = 10Y = 1.5462

2640 day = 1.5600

2894 day = 1.5970

3151 day = 1.6143

3410 day = 1.6319

3590 day = 14 Y = 1.6412

3667 day = 1.6438

3922 day = 1.6415

4175 day = 1.6316

4429 day = 1.6207

4687 day = 1.6165

 

 

Brian Twomey

 

EUR/USD: Levels, Ranges, Targets

 

EUR/USD lows at 1.1216 to highs at 1.2939, 1723 pips contains Mid point = 1.2077 and from 1.1216 to 1.2839 at the 10 year average mid point = 1.2027. EUR/USD closed at 1.2409 and 2 pips above the mid point from the 5 year average at 1.1975 to 10 year at 1.2839.

Vital to 1.2077 and 1.2027 is averages below at 1.2041 and 1.2080 then the 5 year average at 1.1975. This area at 1.2000’s are solid break points. Above, 1.2939 is most upper point at the 2894 day average. Exactly 6 averages exist in the 1.2800’s to include the most vital 10 year average at 1.2839. Current 1.2800’s and 1.2939 is upper range over a 14 year period dated to Jan 1999.

To see 1.3000’s envisioned by many banks then EUR/USD must break all 1.2800 averages as well as 1.2939. Don’t plan on 1.3000’s especially when 1.3000 lacks registration in the averages. View overall ranges as 1.2000’s to 1.2839 at the 10 year for roughly an 800 pip range.

For the week, most vital 1.2041, 1.2080, 1.2140, 1.2154, 1.2182, 1.2293, 1.2423, 1.2498, 1.2552, 1.2668, 1.2708 and 1.2839 for 798 pip range. Averages 100 day, 200 and 253 are overbought enough to consider shorts especially when EUR/USD trades at top range. For a lower EUR/USD then 1.2154 must break. EUR/USD longer term averages overall lack uniformity and explains wider EUR volatile movements. Lower averages 5 to 50 day are oversold.

 

80 day = 1.1984

Special average = 1.2154

335 day = 1.1311

593 day = 1.1216

848 day = 1.1266

1103 day = 1.1782

1279 day = 5Y = 1.1975

1357 = 1.2041

1614 day = 1.2182

Close 1.2409

1873 day = 1.2423

2130 day = 1.2552

2385 day = 1.2668

2640 day = 1.2892

2562 day = 10Y = 1.2839

2894 day = 1.2939

3151 day = 1.2891

3410 day = 1.2875

3590 day = 14Y = 1.2842

3667 day = 1.2829

3922 day = 1.2708

4175 day = 1.2498

Close 1.2409

4429 = 1.2293

4687 day = 1.2140

4899 day = 1.2080

Averages from 4175 to 4899 are misplaced averages.

 

Brian Twomey

 

 

 

 

AUD/USD: Levels, Ranges, Targets

 

Following are Moving averages 80 days to 4899 days and dates to Jan 1999. The noted point is my moving averages are far different than other MA’s as they were carefully chosen and designed for specific purposes. An example. A 100 day averages is actually an 80 day average and 80 days is the location where Forward exchange rate traders are selling Forwards. Forward exchange rate traders are the corporate guys. A 100 day average never reaches 100 days as its actually if memory serves,  75 to 85 day average. How about a 5 day average is actually a 5 day average only on Fridays. The list goes on. A 50 day average is 36 to 50. What is termed my special moving average is as the term states because it was specially designed after much research.

 

The overall AUD 14 year midpoint at 1345 pips is located at 0.8220 and from 0.7547 to 0.8126, the mid point is located at 0.7873. Note 0.7873 midpoint as well as MA’s at 0.7855 and 0.7851. From 0.7851 to 0.7873 represents vital breaks. From a 14 year perspective, the AUD price is extremely low. From a daily perspective, the AUD price is far to high. I know AUD, Australia and its history as well as its markets and I feel for AUD and Australia because its caught inside an uncertain world.

Most vital for the week, 0.7547, 0.7609, 0.7664, 0.7763, 0.7792, 0.7851, 0.7855, 0.7959, 0.7967, 0.8126, 0.8199, 0.8305 and 0.8328.

 

80 day = 0.7763

Special average = 0.7855

335 day = 0.7664,

593 day = 0.7547

848 day = 0.7609

Close 0.7907

1103 day = 0.7967

1279 day = 5Y average = 0.8199

1357 day = 0.8328

1614 day = 0.8643

1873 day = 0.8869

2130 day = 0.8892

2385 day = 0.8741

2562 day = 10Y average = 0.8756

2640 day = 0.8760

2894 day = 0.8710

3151 day = 0.8609

3410 day = 0.8537

3590 day = 14Y average = 0.8471

3667 day =0.8450

3922 = 0.8305

4175 day = 0.8126

4429 day = 0.7959

4687 day = 0.7851

4899 day = 0.7792 Jan 1999

 

Brian Twomey

 

EUR/USD V USD/EUR V CAD/ZAR

 

15 Year

http://fxtop.com/en/historical-exchange-rates-comparison.php?C1a=EUR&C1b=USD&C2a=CAD&C2b=ZAR&C3a=USD&C3b=EUR&C4a=&C4b=&C5a=&C5b=&C6a=&C6b=&DD1=15&MM1=02&YYYY1=2003&C7a=&C8a=&C9a=&C10a=&C7b=&C8b=&C9b=&C10b=&B=1&P=&I=1&DD2=15&MM2=02&YYYY2=2018&M=1&btnOK=Go%21

19 Year to Feb 1999

http://fxtop.com/en/historical-exchange-rates-comparison.php?C1a=EUR&C1b=USD&C2a=CAD&C2b=ZAR&C3a=USD&C3b=EUR&C4a=&C4b=&C5a=&C5b=&C6a=&C6b=&DD1=15&MM1=02&YYYY1=1999&C7a=&C8a=&C9a=&C10a=&C7b=&C8b=&C9b=&C10b=&B=1&P=&I=1&DD2=15&MM2=02&YYYY2=2018&M=1&btnOK=Go%21

25 Year to Feb 1993,  USD/DEM, DEM/USD V CAD/ZAR

http://fxtop.com/en/historical-exchange-rates-comparison.php?C1a=DEM&C1b=USD&C2a=CAD&C2b=ZAR&C3a=USD&C3b=DEM&C4a=&C4b=&C5a=&C5b=&C6a=&C6b=&DD1=15&MM1=02&YYYY1=1993&C7a=&C8a=&C9a=&C10a=&C7b=&C8b=&C9b=&C10b=&B=1&P=&I=1&DD2=15&MM2=02&YYYY2=2018&M=1&btnOK=Go%21

30 Year

http://fxtop.com/en/historical-exchange-rates-comparison.php?C1a=DEM&C1b=USD&C2a=CAD&C2b=ZAR&C3a=USD&C3b=DEM&C4a=&C4b=&C5a=&C5b=&C6a=&C6b=&DD1=15&MM1=02&YYYY1=1988&C7a=&C8a=&C9a=&C10a=&C7b=&C8b=&C9b=&C10b=&B=1&P=&I=1&DD2=15&MM2=02&YYYY2=2018&M=1&btnOK=Go%21

40 Year

http://fxtop.com/en/historical-exchange-rates-comparison.php?C1a=DEM&C1b=USD&C2a=CAD&C2b=ZAR&C3a=USD&C3b=DEM&C4a=&C4b=&C5a=&C5b=&C6a=&C6b=&DD1=15&MM1=02&YYYY1=1978&C7a=&C8a=&C9a=&C10a=&C7b=&C8b=&C9b=&C10b=&B=1&P=&I=1&DD2=15&MM2=02&YYYY2=2018&M=1&btnOK=Go%21

50 Year

http://fxtop.com/en/historical-exchange-rates-comparison.php?C1a=DEM&C1b=USD&C2a=CAD&C2b=ZAR&C3a=USD&C3b=DEM&C4a=&C4b=&C5a=&C5b=&C6a=&C6b=&DD1=15&MM1=02&YYYY1=1968&C7a=&C8a=&C9a=&C10a=&C7b=&C8b=&C9b=&C10b=&B=1&P=&I=1&DD2=15&MM2=02&YYYY2=2018&M=1&btnOK=Go%21

60 year

http://fxtop.com/en/historical-exchange-rates-comparison.php?C1a=DEM&C1b=USD&C2a=CAD&C2b=ZAR&C3a=USD&C3b=DEM&C4a=&C4b=&C5a=&C5b=&C6a=&C6b=&DD1=15&MM1=02&YYYY1=1958&C7a=&C8a=&C9a=&C10a=&C7b=&C8b=&C9b=&C10b=&B=1&P=&I=1&DD2=15&MM2=02&YYYY2=2018&M=1&btnOK=Go%21

65 Years to Feb 1953

 

http://fxtop.com/en/historical-exchange-rates-comparison.php?C1a=DEM&C1b=USD&C2a=CAD&C2b=ZAR&C3a=USD&C3b=DEM&C4a=&C4b=&C5a=&C5b=&C6a=&C6b=&DD1=15&MM1=02&YYYY1=1953&C7a=&C8a=&C9a=&C10a=&C7b=&C8b=&C9b=&C10b=&B=1&P=&I=1&DD2=15&MM2=02&YYYY2=2018&M=1&btnOK=Go%21

 

Brian Twomey

 

 

 

EUR/USD V USD/EUR V CAD/ZAR

 

 

3 momths

http://fxtop.com/en/historical-exchange-rates-comparison.php?C1a=EUR&C1b=USD&C2a=CAD&C2b=ZAR&C3a=USD&C3b=EUR&C4a=&C4b=&C5a=&C5b=&C6a=&C6b=&DD1=15&MM1=11&YYYY1=2017&C7a=&C8a=&C9a=&C10a=&C7b=&C8b=&C9b=&C10b=&B=1&P=&I=1&DD2=15&MM2=02&YYYY2=2018&M=1&btnOK=Go%21

 

6 months

http://fxtop.com/en/historical-exchange-rates-comparison.php?C1a=EUR&C1b=USD&C2a=CAD&C2b=ZAR&C3a=USD&C3b=EUR&C4a=&C4b=&C5a=&C5b=&C6a=&C6b=&DD1=15&MM1=08&YYYY1=2017&C7a=&C8a=&C9a=&C10a=&C7b=&C8b=&C9b=&C10b=&B=1&P=&I=1&DD2=15&MM2=02&YYYY2=2018&M=1&btnOK=Go%21

 

1 Year

http://fxtop.com/en/historical-exchange-rates-comparison.php?C1a=EUR&C1b=USD&C2a=CAD&C2b=ZAR&C3a=USD&C3b=EUR&C4a=&C4b=&C5a=&C5b=&C6a=&C6b=&DD1=15&MM1=02&YYYY1=2017&C7a=&C8a=&C9a=&C10a=&C7b=&C8b=&C9b=&C10b=&B=1&P=&I=1&DD2=15&MM2=02&YYYY2=2018&M=1&btnOK=Go%21

2 Year

http://fxtop.com/en/historical-exchange-rates-comparison.php?C1a=EUR&C1b=USD&C2a=CAD&C2b=ZAR&C3a=USD&C3b=EUR&C4a=&C4b=&C5a=&C5b=&C6a=&C6b=&DD1=15&MM1=02&YYYY1=2016&C7a=&C8a=&C9a=&C10a=&C7b=&C8b=&C9b=&C10b=&B=1&P=&I=1&DD2=15&MM2=02&YYYY2=2018&M=1&btnOK=Go%21

3 Year

http://fxtop.com/en/historical-exchange-rates-comparison.php?C1a=EUR&C1b=USD&C2a=CAD&C2b=ZAR&C3a=USD&C3b=EUR&C4a=&C4b=&C5a=&C5b=&C6a=&C6b=&DD1=15&MM1=02&YYYY1=2015&C7a=&C8a=&C9a=&C10a=&C7b=&C8b=&C9b=&C10b=&B=1&P=&I=1&DD2=15&MM2=02&YYYY2=2018&M=1&btnOK=Go%21

4 Year

http://fxtop.com/en/historical-exchange-rates-comparison.php?C1a=EUR&C1b=USD&C2a=CAD&C2b=ZAR&C3a=USD&C3b=EUR&C4a=&C4b=&C5a=&C5b=&C6a=&C6b=&DD1=15&MM1=02&YYYY1=2014&C7a=&C8a=&C9a=&C10a=&C7b=&C8b=&C9b=&C10b=&B=1&P=&I=1&DD2=15&MM2=02&YYYY2=2018&M=1&btnOK=Go%21

5 Year

http://fxtop.com/en/historical-exchange-rates-comparison.php?C1a=EUR&C1b=USD&C2a=CAD&C2b=ZAR&C3a=USD&C3b=EUR&C4a=&C4b=&C5a=&C5b=&C6a=&C6b=&DD1=15&MM1=02&YYYY1=2013&C7a=&C8a=&C9a=&C10a=&C7b=&C8b=&C9b=&C10b=&B=1&P=&I=1&DD2=15&MM2=02&YYYY2=2018&M=1&btnOK=Go%21

6 Year

http://fxtop.com/en/historical-exchange-rates-comparison.php?C1a=EUR&C1b=USD&C2a=CAD&C2b=ZAR&C3a=USD&C3b=EUR&C4a=&C4b=&C5a=&C5b=&C6a=&C6b=&DD1=15&MM1=02&YYYY1=2012&C7a=&C8a=&C9a=&C10a=&C7b=&C8b=&C9b=&C10b=&B=1&P=&I=1&DD2=15&MM2=02&YYYY2=2018&M=1&btnOK=Go%21

7 Year

http://fxtop.com/en/historical-exchange-rates-comparison.php?C1a=EUR&C1b=USD&C2a=CAD&C2b=ZAR&C3a=USD&C3b=EUR&C4a=&C4b=&C5a=&C5b=&C6a=&C6b=&DD1=15&MM1=02&YYYY1=2011&C7a=&C8a=&C9a=&C10a=&C7b=&C8b=&C9b=&C10b=&B=1&P=&I=1&DD2=15&MM2=02&YYYY2=2018&M=1&btnOK=Go%21

8 Year

http://fxtop.com/en/historical-exchange-rates-comparison.php?C1a=EUR&C1b=USD&C2a=CAD&C2b=ZAR&C3a=USD&C3b=EUR&C4a=&C4b=&C5a=&C5b=&C6a=&C6b=&DD1=15&MM1=02&YYYY1=2010&C7a=&C8a=&C9a=&C10a=&C7b=&C8b=&C9b=&C10b=&B=1&P=&I=1&DD2=15&MM2=02&YYYY2=2018&M=1&btnOK=Go%21

9 Year

http://fxtop.com/en/historical-exchange-rates-comparison.php?C1a=EUR&C1b=USD&C2a=CAD&C2b=ZAR&C3a=USD&C3b=EUR&C4a=&C4b=&C5a=&C5b=&C6a=&C6b=&DD1=15&MM1=02&YYYY1=2009&C7a=&C8a=&C9a=&C10a=&C7b=&C8b=&C9b=&C10b=&B=1&P=&I=1&DD2=15&MM2=02&YYYY2=2018&M=1&btnOK=Go%21

10 year

http://fxtop.com/en/historical-exchange-rates-comparison.php?C1a=EUR&C1b=USD&C2a=CAD&C2b=ZAR&C3a=USD&C3b=EUR&C4a=&C4b=&C5a=&C5b=&C6a=&C6b=&DD1=15&MM1=02&YYYY1=2008&C7a=&C8a=&C9a=&C10a=&C7b=&C8b=&C9b=&C10b=&B=1&P=&I=1&DD2=15&MM2=02&YYYY2=2018&M=1&btnOK=Go%21

 

Brian Twomey

EUR/USD and EUR Cross Pairs: Levels, Ranges, Targets

The common theme to currency market prices remains the relationship to either significant break points or breaks at longer term 5, 10 and 14 year averages. Association to break points explains current market volatility and as mentioned long before, volatility is here to stay for a while.

As market leader on the Non USD side, EUR/USD must break its falling line at 1.2129 to travel lower and EUR/USD for overall context trades between its 5, 10 and 14 year averages at 1.1978 and 1.2842. At 1.2842 is current location of the 10 and 14 year averages and overall a 900 pip range.

From 1.1978 and break points dated to Jan 1999, next points are located at 1.2043, 1.2079, 1.2139, 1.2186, 1.2129, then comes 1.2289, 1.2426, 1.2496, 1.2556 and 1.2669. Higher for EUR/USD would see wider ranges and more volatile movements.
What contains EUR/USD higher is most traded cross pair since year 2000 in EUR/JPY as it broke its most significant point at 133.91 and EUR/JPY must break this point to travel higher. From current 132.85, EUR/JPY broke its 14 and 5 year averages at 131.57 and 130.57 but remains above the 10 year at 126.08. The 10 year must break for significant period changes as EUR/USD remains below its 10 and USD/JPY trades above at 98.96.

From 126.08, the 14 year breaks points are located at 127.10, 127.44, 127.56, 128.33, 129.08, 129.50, 129.93, 130.48, 130.81, 131.08, 131.43, 131.46, 131.56. Massive resistance is located at 133.85 and significant break t 133.91. Why significant is due to next level at 134.08. Previous to the 133.91 break, EUR/JPY traded above every average from 1 to 14 years.

EUR/CHF from current 1.1527, must break 1.1583 to travel higher and target the 100 day at 1.1668. Massive resistance exists below at the 5 year average at 1.1415.

EUR/CAD from wildly overbought and current 1.5540, faces massive supports at 1.5216 and 1.5111. EUR/CAD trades above its 5, 10 and 14 year averages at 1.4541 (14), 1.4413 at the 5 year and 1.4357 at the 10 year. Good short in EUR/CAD.

EUR/NZD from current 1.6936 must break 1.6813 to travel lower or break 1.6952 to travel higher. The 5 year is located at 1.6004 and overall EUR/NZD price remains highly neutral in all its averages.

EUR/AUD from current 1.5701 and overbought must break 1.5443 and 1.5413 to travel lower. The 14 year average is located 1.5320 and 10 year at 1.4821.

EUR/GBP from current 0.881 must break 0.8853 and 0.8849 to travel lower. The 10 year is located at 0.8316.

EUR/USD remains below its 10 year average while above are EUR/JPY, EUR/CAD, EUR/AUD and EUR/GBP. Under performing EUR/CHF and EUR/NZD remains below.

EUR/USD not only trades far above its 5 year average but all respective cross pairs trade above 5 year averages.

Brian Twomey

AUD/USD and AUD Cross Pairs: Levels, Ranges, Targets

 

AUD/USD break last Wednesday at its most significant 0.7907 resulted in a 146 pip move by Friday to 0.7761. As AUD continued its drop, 0.7907 is today’s most vital break at 0.7855. AUD now trades above and threatens to travel higher as most significant points are finely tuned MA’s.

The early warning to AUD/USD’s drop was AUD/EUR Thursday Feb 1 broke 0.6536 and 0.6498 Wednesday FeB 7. AUD/EUR dropped to 0.6328 Tuesday FEB 6 or EUR/AUD 1.5802.

At 0.6536 and 0.6498 translates to EUR/AUD 1.5299 and 1.5389. AUD/EUR at 0.6300’s literally left the charts dating to 1999 and now faces its next break points at 0.6427 and 0.6445 or EUR/AUD 1.5559 and 1.5515. To See AUD/EUR travel significantly higher then 0.6478 must break or EUR/AUD 1.5436.

AUD/EUR break points to 0.6478 dated to Jan 1999 are located at 0.6427, 0.6445, 0.6452 and 0.6489. The 14 year average is located at 0.6605.

AUD/USD break points dated to Jan 1999 are located at 0.7542, 0.7612, 0.7660, 0.7756, 0.7791, 0.7851 then 0.7956 and 0.7972. The 5 year average is located at 0.8207.

The next AUD and complementary pair in the AUD universe is AUD/CHF. At current 0.7345, AUD/CHF must break 0.7501 to travel higher. Failure to break 0.7501 results in a sell rally approach.

AUD/JPY from current 84.64 must break 86.71 to travel higher. For perspective to current wildly oversold AUD/JPY, the 10 year average is located at 85.47 and 14 year average at 86.13. Breaks higher targets the 5 year at 89.33 yet not likely anytime soon.

AUD/NZD at current 1.0791 to travel higher must break 1.0887 then the 5 year average and special designed 100 day average is located 1.0943 and 1.0998.

AUD/CAD as Market Risk Barometer and slowest mover in the AUD universe to travel lower from current 0.9894 and overbought must break 0.9853 and 5 year average at 0.9852. Next supports exist at the special 100 day average at 0.9802 and 10 year average at 0.9743.

Brian Twomey

S&P’s 1997 to 2018: Levels, Ranges, Targets

The S&P’s next break point from its 2621.75 close is located at the 1 year monthly average at 2509.25 then 2 and 3 year monthly averages at 2319.33 and 2226.73. Every Monthly average from 1 to 20 year was viewed for current analysis as 20 years dates to Oct 1997 and contains the 1997 / 1998 and 2008 market implosions.

The tops in current 2621.75 is seen from extreme prices within the averages over 20 years and ranges from 2698.59 lows at the 20 year to 2988.28 highs at the 2 year. The extremes are uniform within the averages from 1 to 5 years then 12 to 20 years.
Confirmation to tops at extremes are seen from Peaks in averages 1 to 5 years to inform the S&P’s are heading and in dire need of a correction. Peak Signals inside current price as an indicator warns not only is a higher price not justified but more variation is warranted to allow a wider trading range. The S&P price in relation to the averages traveled ahead of itself.

Averages 1 to 20 years are nicely uniformed and range from 2509.25 at the 1 year to 1420.73 at the 20 year. Uniformed means no MA crossovers and current price is above every average 1 to 20 years.

The Mid point in all averages is located at 1964.99. The mid point from 10 to 20 year averages are located at 1521.75 and 1 to 10 mid points are found at 2066.01. Extreme overbought to current prices is seen from the 10 to 20 year averages and ranges from 1622.78 at the 10 year to the 20 year at 1420.73. Averages 1 to 10 years from 2509.25 to 1622.78 as well are overbought and current price trades far to high and above its range averages.

While averages 1 to 5 year tops at 2900’s, averages from 14 to 20 years meets extreme prices at the 20 year average at 2698.59 to the 14 year at 2886.17. Averages from 14 to 20 years are not only extremely overbought but averages are lower therefore price rises bumps against extremes far quicker as lower averages. Vital to this analysis is 1.2700’s to 1.2900;s represent far overbought extremes.

A break at the 1 year average at 2509.25 targets next supports at 2469.0, 2319.33, 2316.87, 2226.73, 2157.62, 2140.25 then 2085.0, 2056.75 and 2055.62.

Targets for the 20 averages to align the distribution of prices range from 2648.45 to the 20 year at 1846.68. 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 the 1 year at 2509.25 and 2 year at 2319.33.

Based on targets and supports, 2319.33 and 2316.87 will result in tough points to break especially as Trump tax cuts and regulatory elimination will result in higher earnings for America’s largest companies composed in the S & P’s. Higher earnings is what effects the E side of Price/ Earnings Ratios. On the negative side to lower prices is QE unwind as the S & P rise from 2009 at 659.62 to last highs at 2880.03 was the result of QE as well to target higher Inflation rates. The mid point from market highs and lows from 659 to 2880 is 1769.82.

From Sunday night to Monday trading, targets for the lower points are 2624.30, 2619.19 and 2611.91. On the high side is 2880.77, 2752.53, 2688.41 and 2656.35. Trade strategy from a daily perspective is sell rallies while overall 2509 is in the way to 2300’s. From the close at 2621, at 2900’s or 300 points achieves extremes and 2300’s support or 300 points faces massive resistance.

Brian Twomey

EUR/USD and G10: Levels, Ranges, Targets

 

Rare day for AUD/USD to lead the charge lower on a break of 0.7907 especially when NZD/USD’s break point was 0.7225 and it still traded at 0.7300’s. Normally NZD is market leader and it brings down the non USD pairs in EUR and GBP. Overall trend change occurs short term in USD when USD/JPY breaks 110.72, USD/CHF 0.9567.  USD/CAD as USD market leader broke its respective 1.2520 and now challenges 1.2641. Alternatively, GBP/USD must break 1.3714, EUR/USD 1.2132.

EUR/JPY’s break point at 134.29 is enough to bring down GBP/JPY at 151.81. Ultimate USD Pair and true commodity currency CAD/ZAR at 9.6327 remains below its break points at 10.01, 10.12 at the 5 year average and 10.40 at my special deigned 100 day average.

Overall currency markets and majority of currency pairs are within 100 pips to a trend change where USD becomes dominant as buy drop strategies. GBP/USD and GBP/JPY will fall below its break lines together as GBP/USD must remain dominant correlations to GBP/JPY. The question exists to who will own EUR/JPY in Correlation terms, USD/JPY or EUR/USD.

In the larger dominant market period since the 2008 crash, DXY at 90.00 remains above its break a 78.00, EUR/USD remains below 1.2800’s,  GBP/USD below 1.4700’s, USD/JPY remains above 98.96 and CAD/ZAR remains above 8.8555.  Further, USD/CAD remains above 1.1200’s while wild card USD/CHF must break 0.9798. Only breaks of 10 year averages informs to a wholesale market period change therefore USD retains overall domination until breaks of 10 year averages are seen.

Last post informed USD 10 year yield was oversold and going higher, it did as mentioned. The 2 year was overbought and it finally dropped.

What explains Stock Markets is interest rate ranges covered daily. For USD, last Tuesday 34 pts, Wed 24, Thurs 28, Fri 25, then Monday and Tuesday at 27, Stock Markets lost ability to rise, they killed the ranges. Ranges since the drop retained its fairly normal 30 point intervals to allow Stock market stability and again factor its normal Fair Value.

 

Brian Twomey

 

 

 

AUD/EUR, EUR/AUD Triplets: Levels, Ranges, Targets

 

Why trade AUD/EUR is because AUD/USD is traded twice daily or 24/7  in Asia as well as Europe and America for the past 2 years.  AUD/USD is the prominent pair in the mix but AUD/USD is covered by links to AUD/EUR and EUR/AUD. To understand AUD/USD is to know AUD/EUR and EUR/AUD. A triple trade is born, we’ll call triplets and represented as a musical term. Many triplet trades exist. As another example, GBP/USD, USD/CAD and GBP/CAD.

Australia’s most vital pair historically  is AUD/GBP because Australia was pegged to AUD/GBP from the 1800’s to the 1960’s when the RBA was formed and broke free from Australia’s Treasury Department. Australia maintained the AUD/GBP peg when AUD/USD free floated in 1983. Why the 1800’s AUD/GBP peg is because Australia gained finance access and sustained itself  through London Money Markets until Australia became a formal nation in 1901.  When AUD/USD free floated in 1983, a new triplet trade was constituted as AUD/USD, GBP/USD and AUD/GBP or AUD/USD, AUD/GBP and GBP/AUD. Many ways to view and trade triplets.

AUD/EUR most vital break points for the week dating to 1999. Current AUD/EUR is massively oversold and translates to a rise and drop to EUR/AUD.

AUD/EUR. 0.6427, 0.6444, 0.6452, 0.6488, 0.6511, 0.6526, 0.6533, 0.6593, 0.6605, 0.6641, 0.6690, Rough at 0.6700’s to begin at 0.6736, 0.6746, 0.6764, 0.6770, 0.6804, 0.6809, 0.6896, 0.6917, 0.7072, 0.7083 and 0.7123.

Most vital breaks 0.6511 and 0.6526. The 14 year average 0.6605. Mid point from 0.6605 is 0.6516. Mid point from 0.7123 is 0.6705. Range 0.6427 to 0.6526.

EUR/AUD. 0.6427 to 0.6526 means 1.5559 to 1.5323. AUD/EUR 0.6605 means EUR/AUD 1.5140. Mid point from 0.6516 means 1.5346 EUR/AUD.

 

Brian Twomey

 

 

 

 

EUR/USD and G10: Levels, Ranges, Targets

For the week, most vital break points.

 

AUD/USD  0.7620, 0.7657, 0.7707, 0.7757, 0.7849, 0.7953, 0.7983, 0.8120, 0.8299, 0.8346 and 0.8447.  Most vital to longs and shorts is 0.7707 and 0.7757.

NZD/USD. 0.6985, 0.7016, 0.7085, 0.7120, 0.7148, 0.7225, 0.7260, 0.7319, 0.7340, 0.7390, 0.7411, 0.7420, 0.7434. Most Vital to longs and shorts 0.7225.

EUR/USD. 1.2079, 1.2118, 1.2137, 1.2191, 1.2285, 1.2432, 1.2490, 1.2565, 1.2672 and 1.2701. Most Vital to Longs and Shorts 1.2118.

GBP/USD. 1.3429, 1.3719, 1.4030, 1.4616, 1.4802, 1.4957, 1.5107,1.5165, 1.5198, 1.5625, 1.5987, 1.6155 and 1.6171. Most vital to longs and shorts 1.4727 at 5 year average and 1.3719.

EUR/JPY. 130.45, 131.06,  131.41, 131.57, 131.55, 133.70, 134.19. EUR/JPY from 126.00’s to 131.00’s is solid as many many supports exists. EUR/JPY remains above its 5, 10 and 14 year averages. Most vital break point 134.19.

GBP/JPY. 148.87, 149.15, 149.94, 150.51, 151.92, 152.68, 153.86, 154.82, 159.43, 161.84, 165.76, 168.23. Most vital to longs and shorts 152.68 at 10 year average and vital 151.92. The 5 year average 160.96 and 14 year at 169.77.

USD/JPY. 107.99, 109.47, 110.76, 111.34, 111.50, 111.77, 112.47, 113.95. At 109.47 is 5 year average. Most Vital to Longs and shorts 110.77.

 

Brian Twomey

 

Sonia, OIS, Risk Free Interest Rates

Libor elimination as written many times forced massive changes to markets as focus shifted from 2014 to 2016 to change market structures and prices through Overnight rates. The commonality to overnight adjustment was every nation on the planet was effected as all were forced to re structure.

Most important to Overnight revamp was the consistency nation to nation in term structures was complete and aligned. What aligned was interest rate maturities as well as normal OTC trade ability to Compound interest rates rather than average. Every nation now shares the same maturities from 30 days to 1 year.

Every nation now shares a uniqueness in their own markets as well as solid triggers and market signals to complete trades as levels, ramges and targets. To know any nation’s interest rates is to know any trading day’s Levels, Ranges and Targets in any financial instrument that trades. This includes any commodity to include Gold, Oil, Silver. This also includes Iron Ore in Australia, Dairy in New Zealand and other specialized commodities inherent to a specific nation. Now multiple trades are offered in any market. Currencies may trade for example against yields, stock markets, commodities.

The methodology to interest rate adjustment was to not only force activity in money market, interest rate trades but focus is short term as market designers are interested to ensure liquidity and profitability in banks, pension funds, major companies. Ease of trades and quick in and out to trades is the new order. Libor elimination allowed central banks and interest rate traders to become managers and control of markets rather than as under Libor to allow a market price to fly.

Libor elimination shortened term structures inside respective nations. GBP Libor Friday reported Overnight to 1 year from 0.4725 to 0.818 or a difference of 0.3462. Libor rates are not only wrong but far off the mark to consider a trade in any financial instrument.

Sonia reported 0.4668 to highs at 0.585 and 1 year at 0.775. From 585 to 0.4668 is a difference of 0.1192 and 0.3082 from 775. The new Sonia structure is far more realistic for trades yet trades aren’t going far because the ranges shortened. At 0.34 is a giant move in currency price land while 0.1192 and 0.30 is extremely short to ranges. Actual to Sonia is not 1 year or 6 month rates but 0.4668 to 0.5018 and 0.5137. Now we have 0.0350 and 0.0469. Libor massively dropped ranges from 0.34 to 0.0350 and 0.0469.

As Sonia reforms complete April 2018, the BOE markets committee is working to introduce a new Sonia Futures contract to allow a far better and more realistic term structure. Short Sterling contract appears to be heading for elimination in favor of Sonia / OIS against 1, 3 and 6 month contract durations. Sonia OIS will settle on a realized rate rather than a forward rate.
If Sonia OIS traded today, 1, 3 and 6 month factors to 0.0568, 0.0268 and 0.1182 at 6 months. GBP/USD then factors to 0.9907, 1.0197 and 1.0789. The purpose for the new term structure is to create lower and stable Borrow rates to lend higher in Repo Markets. Channels will compress, GBP exhange rates will suffer indirect effects by slower movements and interest rate trading will become far more robust particularly as Sonia / OIS will settle on realized rather than a forward rate. New daily curves and trend lines must be created everyday.

Sonia / OIS offers a new bottom for all UK financial instruments. More important, Sonia / OIS represents the next phase of markets by creation of Risk Free rates. The ECB is well underway in its Risk free interest rate creation and USD is complete with the New York Finance Rate, a rate however with little purpose or use as the Fed’s system of interest rates lacks a need for changes.

For market traders and written many times, spreads of prices and spreads between and among financial instruments is already seen. Far more of this type of trading will be seen in the future. Consider Sonia /OIS proposes spreads at 0.5. This represents a tiny price zone. Further, as Short Sterling Futures remain alongside GBP/OIS then Basis trading will become the new temporary order. As central banks compress ranges, more sophistication to trade will become the new order.

 

Brian Twomey

 

NZD/USD and Interest Rates 2: Levels, Ranges, Targets

Yesterday’s reported overall NZD/USD range was 0.7322 to 0.7393 with must breaks at 0.7378 and 0.7332. Actual range was 0.7335 to 0.7401 for 66 pips. Yesterday’s reported range was 71 pips Vs actual 66 pips traded. Yesterday, NZD/USD contained 38 available pips to trade which means NZD/USD’s range at 66 pips was just under its full potential of range pips at 76 pips. Had NZD/USD traded its 37 pip range as was the case to begin the week then the overall range pips were 74 pips. NZD/USD range pips jumped this week by 2 pips and this is quite typical for NZD.

What accounts for NZD’s increased range pips is GBP, EUR, AUD range pips expanded. USD pairs contracted. Naturally, GBP, EUR, AUD and NZD expanded. If USD range pips expand then EUR, GBP, AUD and NZD will contract.

The most pronounced pair to see USD expansion and contraction is USD/JPY because of the arrangement as JPY/USD Vs USD/JPY contains miles of distance. The JPY pairs see and feel the effects first because USD/JPY is located middle range in its proper place between USD/CHF and USD/CAD. Take USD/JPY break point at 109.42 means JPY/USD 0.0091390. To align properly, 109.42 = 109.421162.

An explanation exists to USD contraction and Non USD expansion is Fed Funds closed 1.34 instead of normal 1.42 on Wednesday’s Fed day. Last time a move of this caliber was seen was last month’s NFP. Its an interest rate story and despite nasty timing for Fed Funds.

Range is the word to replace the tired and lack of definition meaning to volatility as ranges expand and contract daily, weekly and monthly. As those central banks design and construct their currency pairs, would they design a trading system where the average trader won’t understand, won’t figure on their own. Of course not. Random is a fallacious word in a market price because levels, ranges and targets are well known long in advance and a price quantifies perfectly. Quantifies perfectly means the simplest of simple math rather than a convoluted Stats formula. But again, it depends on a trader time frame for trades.
Why NZD is a special pair is because its first in line to trade after American markets therefore NZD aligns its own interest rates from the Fed. Because NZD trades first, it sets the standard for all Asia currency pairs and market prices. Why AUD/NZD is an important currency pair is because at NZD 1.75 Vs AUD 1.50, NZD rates trade above AUD until or unless NZD lowers its interest rates and possibly AUD raises.

What was learned yesterday from NZD Swap rates is prediction of Tops therefore Swap rates are lend rates in the NZD interest rate system Swap Rates are quite different for AUD as those rates are used for AUD prices.

Today’s NZD/USD will see a range from 0.7329 to 0.7404 with a must cross above at 0.7387 Vs below at 0.7338 and 0.7330.

Not mentioned is today’s NFP.  Remember the progression Money Supply, Interest Rates, Currency Price, Economic announcement. The price part is known.

 

Brian Twomey

NZD/USD and Interest Rates: Levels, Ranges, Targets

Markets contain solid and well known structures. For the past 1000’s of years, Gold and Silver was the structure. Since 1971, interest rates replaced Gold and Silver as the main trade vehicle. Gold and Silver never left nor could ever leave markets especially as Gold/ Silver Ratios remains a premiere currency trade signal.

Markets in 1971 went back to 1896 and Knut Wiksell to design interest rate markets and it all began with the 3 month interest rate. From the 3 month rate began new interest rate maturities then came Libor to connect the world’s currency price to 1 interest rate. Overnight Swap rates then began in 1996 and its popularity as a trade vehicle and currency trade signal soured. To understand and see interest rate progression, the Bank of Canada offers historic interest rates dating to 1939.

What solidified interest rate markets and currency prices in particular was overnight rates. Overnight rates allowed interest rate curves, trend lines and trade methods to draw and construct. Banks and interest rate departments use the word derivative while we maintain simple here by use of interest rates.

Libor elimination and proliferation of interest rate maturities since 1971 forced central banks to redesign interest rate markets under a 2 year process from 2014 to 2016. As interest rate markets are well established and matured, wholesale changes was impossible therefore interest rate markets were rearranged and new place settings at the table were implemented.

Pre 2014, interest rate to the exchange rate was top central bank priority and trade method. Post 2016, focus shifted to strictly interest rate markets and exchange rate as an indirect effect. Trading methods in currency prices remain the same but as central banks rearranged the tables, trade methods, signals and targets shifted along with the changes.

If monies floated and traded through interest rate markets then exchange rate containment would become automatic. Why intent focus on Sonia in the UK is because final changes from 2014 implements this month. More important, we’re dealing with Statistics and market departments with vast understanding and ability to redesign markets. Their knolwedge far surpasses most traders in all markets.

Changes to each nation means currency price signals and triggers were revamped. Each nation’s interest rate markets contained a uniqueness yet all interest rates nation to nation remain relatively the same price. OCR in Australia and New Zealand for the most part are the same yet used vastly different. Australia OIS and Swap Rates and New Zealand OIS and Swap rates are the same yet use vastly different. Fed Funds and Eonia are the same but used differently in traded markets and correlations were designed as total opposites.

Certain interest rates are designed as tops, trade able levels, ranges and targets. Certain interest rates targets long term while other rates are designed for short term. The short term example is the previous GBP/USD / Sonia trade in the last post. The trade was done with profit at less than 2 full hourly candles. Nothing new here as we trade this method twice daily without ever a loss.

Note the focus not on yields as yields serve as another market far away from an interest rate and currency price and contain no assistance or reference to a currency price.

Yesterday’s NZD Swap rates: 1.7950, 1.8375, 1.8800, 1.8883, 1.8966 and 1.9050. The RBNZ employs a Swap Rate Close price as the 10 and 2 yield and its used to view a bottom currency price in the far far distant future.

Yesterday’s Swap rates inform NZD/USD at 0.7509 to 0.7805. NZD/USD traded at 0.7300’s informs for the most part, headwinds exist to upper NZD prices. Yesterday’s NZD selloff was no surprise.

Today’s NZD/USD will see a range from 0.7322 to 0.7393 with a must cross at 0.7378 above and 0.7332 below.
Obviously much more exists to an interest rate / Currency price trade strategy but the basics were offered and its offered and traded twice daily by me and those who join my signal service.

Message to long time  friends, readers and followers is don’t look for Fxstreet or Investing.com posts any longer. Its no longer worth the trouble.

 

Brian Twomey

 

 

GBP/USD and Sonia: Levels, Ranges, Targets

When Sonia and Gilt Repos were last visited, the post explained the new BOE interest rate arrangements and presentation from its website redesign. Did the BOE really hide its most vital 3 month interest rate. Its impossible to do so nor can the BOE eliminate the 1 and 2 week Sonia rate because Sonia is the borrow rate and Repo the lend rate.

Why the 1 and 2 week Sonia rates at 0.36 are meaningless for the shortest term is because of the zero effect to the exchange rate as GBP/USD trades at 1.4000’s. The significance of the bottom is Sonia 3 month bottomed Aug 2017 at 0.31 and rose to 0.44 today for a mid point at 0.3750. Repo 3 month bottomed at 0.24 Aug 2017 and rose to 0.4950 for a mid point at 0.3675. The borrow low, lend high scenario juxtaposed Aug 2017 and GBP/USD went on a 1500 pip romp from 1.2800 to 1.4300’s and stopped just before 1.4400’s. A juxtaposed position is an MA crossover.

What is most vital to the story is not only the new presentation of interest rate charts over many years but the top question must be addressed first.

Wide territory in Sonia existed from 0.49 to 0.585 and this territory must factor as 0.5018, 0.5137 and 0.5375. But obviously we are at the longer end of the constructed curve and this is meaningless to the exchange rate. Today’s 0.49 factors as GBP/USD at 1.4285 and 0.5018 factors to 1.4398 while 0.5137 factors to 1.4512 and 1.4740 at 0.5375.

At today’s 0.45, GBP is well factored at 1.3949 but this represents a range point and a more vital break than an everyday trade able level. Therefore, today’s bottom is factored to 1.3958. Today’s 0.36 factors to 1.3038 and 0.44 to 1.3805 and no assistance.

Three range points exist above at 1.4093, 1.4109 and 1.4141 therefore the topside rises to 1.4141.

My presentations from 3 years of intense interest rate calculations are Levels, Ranges and Targets. Levels are trade able points that must trade in order for a price to move to its destination. A range point is vital to the life of a continuation in prices and Targets are just as the word implies. The Range is the most important, most misunderstood yet most fascinating to the currency price as a range break even by a 1 pip violation implies whether a price will continue on its present course or reverse in the opposite direction.

Today’s GBP/USD target is 1.4141 then it begins to drift to 1.4109 and 1.4093, 1.4062, 1.4033 and 1.4024.

Mush time was spent on GBP and Sonia therefore next posts I’ll demonstrate NZD and AUD.

Brian Twomey