Inside the Currency Market: EUR/USD

Since last post at 1:00, EUR/USD saw an 18 pip range from 1.1262 – 1.1280. NZD/USD sell 0.6360 saw 0.6341 target as mentioned.

As mentioned, EUR curve dropped significantly while USD rose appreciably. If Big Sis Yellen raises, she must raise from 0.25 to 0.50. That’s 1/4 or 0.0025. Why 1/4, because USD yields are quoted in 32nds or 1/2, 1/4, 1/8, 1/16, 1/32. Yet interest rates are straightforward as all other nations.

Significant to the USD raise in the curve is conditions are now perfectly met for Yellen to raise. Interest rates are trading at or above 0.25 at the most significant points. This is a huge signal. It states Yellen will raise. I want to view again tomorrow afternoon to ensure the signal remains. If so, Yellen raises Thursday. The FED is a far different central bank from all other central banks. Its unique yet distinct in many respects.

EUR/USD. Bottom. 1.1226. Range break above 1.1308, Below 1.1255. Overbought sell point 1.1353, failure point 1.1323. Market’s been dead, monitor levels closely. Strategy. Longs above 1.1283, Target 1.1353 then reverse short to 1.1318. Points on the way up, 1.1291, 1.1307, 1.1315, 1.1323, 1.1330, 1.1338, 1.1353.

Shorts below 1.1281, Target 1.1254. Watch here for reversal to 1.1281. Points on the way down, 1.1278, 1.1274, 1.1270, 1.1266, 1.1258, 1.1242, 1.1226 Bottom. Point 1.1254 must cross to go higher.

Brian Twomey, Inside the Currency Market, btwomey.com

Inside the Currency Market: NZD/USD

NZD/USD Current price trades at 0.6357 and already passed its overbought sell points at 0.6326 and 0.6336. The top of the channel is found at 0.6384 and 0.6390. To achieve 0.6384 and 0.6390, NZD/USD must break 0.6360 and 0.6363. But a range break exists at 0.6372 and a must break to see 0.6384 and 0.6390. A rough patch exist for NZD at 0.6360, 0.6363 and 0.6372 so we want to look for sells.

Bottom. 0.6288. Strategy. Sell 0.6360, 0.6363 unless 0.6372 breaks. Target met. at 0.6360 then short to 0.6342 and 0.6336.
Shorts must break 0.5320 to target 0.6304 then on the way down, 0.6312, 0.6309, 0.6307, 0.6296, 0.6288 Bottom.

Brian Twomey Inside the Currency Market, btwomey.com

Inside the Currency Market: EUR/USD

Morning trades are good until about 12:00. After 12, prior targets, ranges, everything no longer counts. Rarely do trades last until 12 since we are in profit and exit long before. I haven’t recorded a tally for last trades so no big deal on that score. 250 + trades are open for inspection anytime for interested. My system should be rolling again this evening so many many more trades posted here.

What drove Euro higher last week and previously mentioned was middle section of the curve opened wider. Also mentioned was the gap was closing quickly. That gap continues to close and should force Euro much lower. Two important points above are 1.1409 and 1.1365 while below a bottom is located at 1.1212. Ranges expanded since Sunday, finally so we should see much better movements. The current daily range is now found at 67 pips. That’s not terrible.

EUR/USD. Bottom. 1.1212. Range break above 1.1294, Below 1.1241. Overbought sell point 1.1339, failure point 1.1309. Strategy. Longs above 1.1268, Target 1.1339. Then reverse short to 1.1303. Target at 1.1309, short to 1.1288. Points on the way up, 1.1277, 1.1293, 1.1309, 1.1324, 1.1339.

Shorts below 1.1267, target 1.1239. Watch here for reversal to 1.1267. Points on the way down, 1.1264, 1.1260, 1.1252, 1.1248, 1.1244, 1.1228, 1.1212 Bottom. Point 1.1239 must break to go higher.

Brian Twomey, Inside the Currency Market, btwomey.com

Inside the Currency Market: EUR/USD

EUR/USD hasn’t changed since Sunday night opening. The entire EUR system is held in Stasis, no change, no movement nothing. We want to monitor points offered and not look for far away targets to hit. We can’t expect range breaks.

EUR/USD. Bottom. 1.1263. Range break above 1.14433, Below 1.1163. Overbought sell point 1.1376. Strategy, Longs above 1.1323, Target 1.1376. Then reverse short to 1.1349.Points on the way up, 1.1323, 1.1336, 1.1350,1.1363, 1.1376.

Shorts below 1.1320, Target 1.1291. Watch here for reversal to 1.1320. Points on the way down, 1.1319, 1.1313, 1.1306, 1.1299, 1.1293, 1.1278, 1.1263 Bottom. Point 1.1291 must cross to go higher and target 1.1320.

Brian Twomey Inside the Currency Market, btwomey.com

Fed Interest Rates

Month averages. 1 month Non Financial Commercial Paper, 0.10, 2 Month 0.14, 3 Month 0.18, Commercial Paper Financial 1 Month 0.13, 2 Month 0.20, 3 Month 0.26. Eurodollars no change 1 – 3 Month. Yields 30 day = 0.03, 3 Month = 0.07, 6 Month = 0.22, 1 y= 0.36. Average 0.17, Median 0.18. range 0.32. A Peak is here. Average, Median Range = 0.0017, 0.0018, 0.0032. Average trading Range = 1.9 times Average, and 1.8 times Median.

Weekly. Average 0.1944, Median 0.22, Peak above halfway point, Range 0.32. Average, Median, Range = 0.0019, 0.0022, 0.0032.

Yield Curve Monthly. Average 1.22, Median 1.03, Range 2.82, Peak below Halfway point. Average, Median, Range = 0.0122, 0.0103, 0.0282. Monthly yields trading V Ranges, 2.3 times average and 2.7 – 2.8 times Median.
Weekly Yield Curve Average 1.2527, Median 1.05, Range 2.94, Peak above halfway point.Average, Median, Range = 0.0125, 0.0105, 0.0294. Weekly Yields trading V ranges = 2.3 times average and 2.8 times Median.

USD Interest rate ranges trade below EURO Interest rate ranges at 2.0 – 2.6 times. Not an ounce of excitement exists in USD to raise, trading and Ranges. EUR/USD and EUR pairs remains the trade to gain most pips per trade. GBP as a hybrid currency will see limited ranges and movements. EUR is pure and will see good volatility. USD both as a currency, interest rate hike, fundamentals remains truly a heart breaker. If Yellen and the Fed Board keynesians raises, its a complete surprise. This time Big Sis Yellen has plenty of excuses to make her look almost credible. The full Keynesian board don’t want to raise. Keynesians are not free market people, they seek full control rather than free markets. Its why I saw in past statements they are literally scared to raise.

I add how insulting and embarrassing are commentators. They speak without doing homework. Siegal on CNBC adds new Dot Plots come out Thursday. Those Dot Plots are called Central Tendency by the Fed. They are merely 5 year averages of Fed Funds Effective. We remain far far ahead of the curve, commentators, market developments and market prices.

Brian Twomey, Inside the Currency Market, btwomey.com