Quarterly Review 200 Pairs January – May 2015

Inside the Currency Market: EUR and Majors Pairs Vs Equilibrium Vs 27 Counterparts
Posted by Brian Twomey on February 3, 2015 at 2:30pmView Blog
In the 3rd Bi annual review of our currency pairs Vs Equilibrium and Vs the major pair alignments against each other, the view of the major pairs was expanded to include 27 pairs. CHF for example as CHF/ Other Currency was viewed Vs 27 counterpart pairs. The full view of Majors Vs 27 counterparts total about 196 + currency pairs, about because ILS, Israeli Shekel was thrown in the mix as well as NOK/SEK and other pairs important to the world and currency markets.
The previous view of Major Pairs Vs each other included about 130 pairs. Its a view that determines currency pair alignments not only Vs each other but those relationships are known Vs Equilibrium. The purpose for this methodology is to understand what types of markets trade, alignments Vs Realignments, which pairs are anomalies, which pairs fit the matrix. Any aberrations in currency pair locations and positions are then bought and sold.
Equilibrium is Central Bank speak and intimates various interpretations from central bank to central.bank. In the broader context, its defined as neutral zones and an important location for currency pairs because many belong to this category A few examples.
GBP/CAD 1 year and 6 months ago was in the neutral zone, today it remains in the neutral zone. GBP/CHF 1 year and 6 months ago was in the neutral zone, today its position is far below Neutral zones. GBP/JPY bounced twice from the neutral zone 1 year and 6 months ago and is on the verge to graduate to neutral again. USD/KRW just graduated to Neutral from below for the past 1 year and 6 month review. EUR/CAD remains in neutral zone in all 3 reviews, 1 1/2 years and running. GBP/AUD remains in the neutral zone 1 year and running while EUR/AUD graduated to neutral from its position on the floor 1 year ago. GBP/NZD graduated to neutral from its position on the floor 1 year ago. NOK/JPY remains in the neutral zone 1 year running while USD/CZK graduated to above its neutral zone. GBP/SEK remains neutral 1 year running. In the new review, AUD/CAD graduated to neutral as well as EUR/GBP, NZD/USD and USD/HKD.
The expanded view reveals for example all 27 pairs as CHF/ Other Currency including CHF/USD is above the neutral zone. CHF/CNY is the only pair below. Every CHF pair is bought today as possibly a means to offset EUR in the Swiss balance sheet. A speculation.
All 27 USD pairs are above neutral zones except USD/CHF. USD/ILS is above. For JPY pairs, 16 are below Neutral zones, 3 above and 7 in Neutral. Following is the list above, below and Neutral for 199 currency pairs.
EUR. Above Neutral: EUR/HUF, EUR/IDR, EUR/BRL, EUR/NOK, EUR/PHP, EUR/PLN, EUR/RUB, EUR/SEK, EUR/TRY, EUR/ZAR, EUR/JPY,
Neutral: EUR/CAD, EUR/AUD, EUR/GBP, EUR/CZK, EUR/DKK, EUR/INR
Below: EUR/USD, EUR/CNY, EUR/HKD, EUR/KRW, EUR/MXN, EUR/SGD, EUR/THB, EUR/PHP, EUR/NZD, EUR/CHF.
GBP. Above Neutral: GBP/RUB, GBP/BRL, GBP/NOK, GBP/HUF, GBP/IDR, GBP/INR, GBP/PHP, GBP/PLN, GBP/TRY, GBP/ZAR, GBP/JPY, GBP/MXN,
Neutral: GBP/CAD, GBP/AUD, GBP/NZD, GBP/CZK, GBP/DKK, GBP/SEK, GBP/THB,
Below: GBP/USD, GBP/PHP, GBP/CNY, GBP/HKD, GBP/SGD, GBP/KRW, GBP/CHF.
JPY. Above: JPY/ZAR, JPY/BRL, JPY/RUB,
Neutral: JPY/AUD, JPY/CZK, JPY/HUF, JPY/IDR, JPY/NOK, JPY/PLN, JPY/TRY,
Below: JPY/CNY, JPY/CAD, JPY/CHF, JPY/DKK, JPY/EUR, JPY/GBP, JPY/HKD, JPY/INR, JPY/KRW, JPY/MXN, JPY/SEK, JPY/NZD, JPY/PHP, JPY/SGD, JPY/THB, JPY/USD.
CHF: Above: CHF/KRW, CHF/NOK, CHF/PHP, CHF/RUB, CHF/SGD, CHF/TRY, CHF/ZAR, CHF/USD, CHF/MXN, CHF/NZD, CHF/PLN, CHF/SEK, CHF/THB, CHF/DKK, CHF/AUD, CHF/BRL, CHF/CAD, CHF/CZK, CHF/EUR, CHF/GBP, CHF/HKD, CHF/HUF, CHF/IDR, CHF/INR,
Neutral: Zero
Below: CHF/CNY
AUD. Above: AUD/BRL, AUD/CZK, AUD/HUF, AUD/IDR, AUD/NOK, AUD/RUB, AUD/TRY, AUD/ZAR,
Neutral: AUD/SEK, AUD/DKK, AUD/PLN, AUD/CAD
Below: AUD/USD, AUD/CNY, AUD/HKD, AUD/INR, AUD/KRW, AUD/MXN, AUD/PHP, AUD/SGD, AUD/THB, AUD/NZD.
NZD. Above: NZD/RUB, NZD/PLN, NZD/BRL, NZD/DKK, NZD/EUR, NZD/HUF, NZD/IDR, NZD/INR, NZD/ZAR, NZD/SEK, NZD/NOK,
Neutral: NZD/USD, NZD/GBP, NZD/HKD, NZD/KRW,
Below: NZD/PHP, NZD/CNY, NZD/CZK, NZD/THB, NZD/CAD, NZD/CHF, NZD/SGD,
CAD: Above: CAD/RUB, CAD/TRY, CAD/BRL, CAD/CZK, CAD/NOK, CAD/IDR, CAD/INR, CAD/NZD, CAD/ZAR
Neutral: CAD/SEK, CAD/DKK, CAD/PLN,
Below: CAD/HUF, CAD/HKD, CAD/AUD, CAD/CNY, CAD/KRW, CAD/MXN, CAD/PHP, CAD/SGD, CAD/THB, CAD/CHF,
Below: NOK/SEK, SEK/CNY, NOK/CNY, USD/CNY
Brian Twomey, Inside the Currency Market, btwomey.com

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