Inside the Currency Market: EUR/USD

My absence this morning was due to paper related issues regarding paperwork, payment arrangements. Both issues had to be addressed immediately due to strict timelines. I’m back in action everyday as usual.

Non farm Payrolls forecast was 217,000, and saw 173,000. The significance to Non farm Payrolls since inception in 1939 is the 50,000 range of jobs. its a small release because the 50,000 range has been a fixed range since 1939. Expected forecasts are based on a 9ish year simple average. Nobody I mean nobody ever goes past the 10 year average mark because the BIS offers it freely in a table on site so all extract 10 year information and interpolate and think they got all issues covered. Bernays propagandists at work again. 217 expected minus 173 actual = 44,000. Point 167 was the bottom, 217 minus 50. The forecasts are always to high and never met so the 50,000 must be factored above and below expected. I agree with Lacker at the Richmond Fed, it wasn’t a terrible result at 173 and no cause for alarm. Does the Fed raise. Current 0.25 is 0.0025, Inflation is 0.0001. Big Sis Yellen wants 0.0002 and the raise to 0.5 is 0.0050. Fed Funds is 0.0014. Fed Funds trades above Inflation and holds a great floor for a raise. I suspect the Inflation rate is key and must travel higher to provide an additional floor. It might explain why I saw in years of past Fed Minutes why the Fed was so scared to raise. If the Fed raises and the bottom drops then Inflation goes negative.

To understand Non Farm payrolls historic 76 year numbers, its here,

EUR/USD. Bigger picture, bottoms exist at exactly 1.0643, 1.0628, 1.0618, and 1.0603. Points will change roughly 50 – 100 pips over the next week. Tops exist at 1.1210, 1.1260 and 1.1275. Most important is 1.1260. This point will move roughly 50 – 100 pips all next week. At 100 pips, 1.1260 gives us the 1.1363 must break to see EUR/USD higher. Yet 1.1210 and 1.1275 are vital to moves higher. The overall range is 631 – 570 pips exactly. From EUR/USD 1.1100 then bottom equates to 1.0530 and 1.0469 and tops at 1.1670 and 1.1730. Realistically, ranges are found from bottoms at 1.0600 to 1.1200’s. Either side are must breaks to see EUR/USD higher or lower. Factor daily pip movements found at current 63 pips then this says so far neither 1.06 nor 1.1200’s will break. The strategy overall is continuation to sell rallies.

EUR/USD. Bottom. 1.1085. Range break above 1.1252, below 1.0937. Overbought sell point 1.1194 -1.1205. Strategy. Longs above 1.1142, Target 1.1194. Then reverse short to target 1.1167. Overall I would be very careful going long because price is almost mid range. Points on the way up, 1.1142, 1.1143, 1.1155, 1.1167, 1.1180, 1.1194.

Shorts below 1.1140, Target 1.1112. Watch for reversal here to 1.1141 and higher. Break 1.1112, remain short to target 1.1139, 1.1132, 1.1126, 1.1120, 1.1114, 1.1099 then b Bottom 1.1085.

Brian Twomey, Inside the Currency Market,


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