Inside the Currency Market: EUR/AUD

Longs this morning from 1.5121 targeted 1.5191, price dead stopped at 1.5172. Like EUR/JPY, EUR/AUD has a higher target unless 1.5131 breaks lower. This forecast may or may not be valid at the China open at 9:30 EST. China is using close prices, that’s like pricing currencies based on a moving average, its just not the 130 year tradition. For interested, FX Trader magazine at fxtradermagazine.com contains my article on the history of the Currency and Gold FIX and Gold since 1900. Or on my site way at the bottom somewhere.

EUR/AUD. Bottom 1.5056. Range break above 1.5253, Below 1.5010. As long as price holds above 1.5132 then target becomes 1.5219. Note however the range top at 1.5253. Like EUR/JPY, we want to watch for a possible failure just before 1.5219. Points on the way to 1.5219, next 1.5147, 1.5155, 1.5163, 1.5179, 1.5189, 1.5199, 1.5209, 1.5219.

A break of 1.5132 targets 1.5093 then the range bottom at 1.5056. On the way below 1.5117, 1.5101 then target at 1.5093 and 1.5056.

Oh volatility, a fictitious word that doesn’t apply to currency prices. The average EUR/USD range this morning was 57 pips and 58 pips this afternoon. 116 pips separated the Mean from the Median prices this morning and 127 pips this afternoon. Not an ounce of volatility exists in these markets. 100 pips even 200 pip moves hardly moves the needle. Today’s currency prices sit at the most compressed ranges since year 2000. Since 2000, ranges were about 500 pips daily then decreased every year since. Now we see 100 pip ranges and get excited to see a 150, 200 pip move. Its taken 15 years to see the current lowest compressed ranges. What will change increased ranges is a Fed Funds rate hike and hopefully many more by other central banks. What happened in the past 15 years was rate decreases and it compressed ranges down to nothing as what we see today. Price moves way back in the good old days on the screens saw not one pip moves like today but 2 and 3 pip moves at one time.

Brian Twomey, Inside the Currency Market, btwomey.com

Inside the Currency Market: EUR/JPY

EUR/JPY target this morning was 138.91, price achieved so far 138.68 from 138.23. The target is now raised higher to 139.35. EUR/JPY shorts are valid only on a break below 138.55. I will offer the points on a break of 138.55 in case catastrophe strikes the markets but its not likely to happen. China is the problem but we have 5 hours yet to the China open.

Bottom. 137.86. Range break above 139.66, Below 137.45.

Next above for EUR/JPY 138.69, 138.84, 138.91 ( Old target), 138.99, 139.17, 139.26, 139.35. Overbought points begin between 139.26 – 139.35. Severe overbought begins between 140.04, 140.38 and 140.73. Note we have a range above at 139.66. We want a 139.35 target. Watch for a failure before 139.35. The short reversal comes at 139.35 to target 138.20. The China open may change this forecast so don’t be bashful to take profits, I will report again at the open.

A break of 138.55 then short to target 138.20, then the range bottom at 137.86. Points on the way down, 138.42, 138.27, 138.20, 138.03, 137.86.

Brian Twomey, Inside the Currency Market, btwomey.com

Inside the Currency Market: EUR/USD

Regarding China comments 2 days ago and the question to price the Yuan. Since China entered the world again upon the comments in the 1980’s by Deng Xiaoping “to be rich is glorious”, the Yuan currency was Fixed. The convention of the currency Fix dates its history to the industrial revolution and most probably long before. The Fix is a means for nations to price their currency to allow a Reference rate in trade, to sign trade contracts, to adjust money supplies in banks, to add debits and credits to bank accounts, to allow banks dealing rates, to adjust interest applied to contracts, bank accounts, sales deals. The list goes on. The FIX is the tradition of currencies and prices adopted by every nation in the world for the past ? 130 years. China’s deal is to refuse to Fix the Yuan and instead employ the close price from the previous day. China now wishes to go against the grain of tradition. Its a dangerous predicament because other nations must decide the value of their currencies in relation to the Yuan. The remainder of the world doesn’t price or value their currencies based on the close price nor do I understand how it could ever be done. So China puts the world in a dangerous position. Never could currencies actually Free Float. The term doesn’t exist. Currency prices are managed and dictated by the central banks.
China’s goal was always to force acceptance of the Yuan. The current proposal for the Yuan to be included in the IMF’s SDR basket has been debated and requested by the Chinese going back to the 1980’s. The debate heated up in the 1990’s when the first George Bush granted Most Favored Nation trade status to the Chinese in 1990. Then the United States was inundated with $200 million per year in shoes manufactured by the Chinese. Then other products then more and more. Now we are supposed to go with the idea that the Yuan is legitimate after only 25 years out of China’s latest hibernation. To understand the Chinese, they date their tradition 5,000 years. They claim the moniker kings of Asia because they gave the Asian language and writings to all people of Asia. But through 5,000 years when China joins the world, they stay until they go to war or are attacked, offended then they hibernate until the next time when they come out. Look at China as a flower, they blossom and wilt over periods of time. When they blossom, they claim the world prospers and loses when they hibernate. People bow to the Chinese and China expects nations to bow to them because they were the first nation on the planet. They are slow yet methodical but always with eyes on the prize to legitimize the Yuan and to become the kings again.

EUR/USD. target this morning reached 1.1150, 14 pips shy of target. Bottom. 1.1086. Range above 1.1231, below 1.0950. See ranges are dynamic, never fixed. Overbought sell point 1.1206.

Strategy. Shortest term. Shorts from 1.1150 target 1.1113 then Bottom at 1.1086. From 1.1150, 1.1146, 1.1141, 1.1131, 1.1119, 1.1113.

Brian Twomey Inside the Currency Market, btwomey.com

Inside the Currency Market: EUR/AUD

EUR/AUD. Bottom 1.5045. Range above 1.5364, Below 1.4880. Overbought sell point 1.5196. Strategy. Price above 1.5122, targets long to 1.5196. Reverse short at 1.5196 to target 1.5159 then 1.5122.

Price below 1.5120 targets 1.5082 then Bottom at 1.5045.

Brian Twomey, Inside the Currency Market, btwomey.com

Inside the Currency Market: EUR/JPY

Bottom. 137.53. Range above 140.45, below 136.03. Overbought sell point 138.91.

Strategy. Below 138.22 targets 137.87 then break targets bottom at 137.87. Above 138.23 targets long to 138.91. On the way up, 138.24, 138.26, 138.32, 138.44, 138.57, 138.83, 138.91. Reverse short at 138.91 to 138.57 then 138.23.

Brian Twomey, Inside the Currency Market, btwomey.com

Inside the Currency Market: EUR/USD

Bottom. 1.1053. range break below 1.0932, above 1.1200’s.. Strategy. To target bottom 1.1053 then 1.1080 must break below. Above 1.1080 targets 1.1108. Price must break 1.1109 to target 1.1164. Above 1.1109 points, 1.1111, 1.1116, 1.1126, 1.1136, 1.1150, 1.1164. Normalization is back, targets, levels and ranges are perfect. 1.1109 is a tough break and may not be seen. If 1.1053 breaks and its not likely until possibly this afternoon, then its short on the 1.1053 break. This is the forecast and dictated by the central banks. Central banks love to see those long 1 hour candles cause they set rates in between on the candles to stop price movements. That’s why it takes so long for prices to leave those ranges.

I will look and post other pairs. Will post this afternoon as well.

As always thank you to my friends at Fxstreet, hope your pockets are and will continue to be filled. Thank you Fxtraderhub.com

Brian Twomey Inside the Currency Market, btwomey.com

Inside the Currency Market: NZD/USD, 3 Hour Forecast.

No post last evening because the EUR/USD from yesterday afternoon was the actual forecast and the forecast performed perfectly. I didn’t see it in the afternoon but once China opened, I saw exactly what they were doing. It was then I knew the forecast would hold. 1.1188 held, 1.1159 finally broke to give us a run to the bottom at 1.1131 and eventually break. 1.1159 held as stated till the China open. The forecast held because the central bankers held prices in small ranges purposefully. My calculations are the exact same calculations performed by every central bank the world over. Our few rare misses appears to now be over and we are back to normalization. That means target will again hit perfectly as was the case in the last 30 days.

NZD/USD/ MZD looks interesting and a continued focus today as well as the EUR.

Bottom. 0.6576 exactly. Watch this point. Range above 0.6625, below 0.6593 and 0.6510. Overbought 0.6634 – 0.6654.

Strategy. 0.6610 defines NZD direction. Long above 0.6610 to target 0.6633, 0.6643, 0.6654. We are after the main target at 0.6654 point. Points on the way up, 0.6627, 0.6633, 0.6643, 0.6654. Below 0.6609, targets bottom at 0.6576. Then to head higher the point at 0.6592 must break then 0.6609, 0.6610.

Brian Twomey Inside the Currency Market, btwomey.com