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

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