Inside the Currency Market: AUD/USD

MXN. Long from 16.2050 dead stopped at 16.3000 and short of my reported 15.3100. I didn’t see the 16.3100 target and that was a good call. I recommended long to 16.2500 — 16.2800 then short. The top was missed by about 200 pips. Reverse Shorts from the highs then dead stopped at 16.2030. The trade paid 1000 pips on longs and 1000 pips on the shorts for total 2000 pips. MXN is always the pair to grab pips if G10 are running funny but MXN is such a terrific forward indicator to lend insights into g10’s. SEK, NOK and ZAR are those same pairs, same indicators but no pair has the full insights as MXN.

EUR/USD shorts from recommended 1.1042 dead stopped at 1.0963. I will take a look at EUR later and see what’s happening. What I knew from AUD and MXN to include EUR from yesterday morning and afternoon is prices are starting from overbought since we are way out on the curve. Yet our pairs are ranging as significant breaks aren’t close in many pairs, AUD is quite different. NZD 2 days ago was also very different. It was in its usual dead center position but range breaks again weren’t even close.

9 hours ago at the dead stop 0.7440 is today 0.7445 then next 0.7473. The AUD bottom 0.7287, target on longs 0.7347. The problem with AUD is it has many ranges within its price structure. For example, to see 0.7287 then AUD must break 2 range points at 0.7309 and 0.7299. To head higher and achieve the 0.7347 target then range points must break at 0.7338, 0.7348, 0.7373 then on to 0.7445.

What decides AUD is the points between 0.7323 – 0.7325. The strategy is long above 0.7325 to target the vicinity at 0.7347. Below 0.7323 targets 0.7309, 0.7299, 0.7287 bottom. Points on the way up, 0.7332, 0.7339, 0.7347. Below 0.7299 comes next 0.7274, and 0.7203. Not only are my points vital but ranges must be monitored closely today.

Next AUD report, around 8:45 EST. If AUD still looks rough then maybe we jump to EUR and EUR pairs.

Brian Twomey, Inside the Currency Market, btwomey.com

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