Inside the Currency Market: AUD/USD

Big Bottoms for AUD/USD are located at 0.6901, 0.6523, 0.6490 and 0.6391. The current intraday bottom is found at 0.7172. Intraday, shorts remain below 0.7239 and 0.7300. Range breaks occur at 0.7113, 0.6967 and 0.6843. Ranges are opening wider,finally.
The best sell point intraday is found at 0.7226. Intraday, AUD/USD is in a new downtrend provided 0.7239 and 0.7300 holds. Its not oversold not overbought yet way oversold in long and medium terms. But that’s not new.

I would continue short, short on rallies and look for AUD to head lower. Short term I would begin targets at 0.7113.

Brian Twomey, Inside the Currency Market,

Inside the Currency Market: EUR/USD

If prices take off before a post then the post becomes a mute point. I can’t write a forecast after the fact. More of the same here is expected. We remain committed to EUR pairs, GBP is still not worth the trouble. EUR/USD slid 200 pips, GBP/USD dropped 70. See what I been saying about GBP. AUD and NZD are not thrilling either. AUD is dead stuck in its ranges. NZD sits on monster supports. On the economic side, GDP for NZD, AUD, UK, USD will post shortly. USD unemployment will post as I have data dating to 1948 inception. I’m interested in EUR/USD Correlations Vs Gold/Silver Ratios. Silver Correlations Vs EUR/USD shockingly failed. I want to view Gold and EUR/USD but Gold in USD terms, maybe EUR, depending on findings.

This morning post and on, I reported 1.0895 as the big break to see EUR/USD lower. Those points are found exactly at 1.0870, 1.0844, 1.0822 so far, so far. The bottom for now holds at 1.0672. Big break points above remain at 1.1154, 1.1220, 1.1595 and dynamic 1.1385. The overall range today and possibly next day is 50 pips. This is a severe decline and could mean the next day or so will be slow moving.

EUR/USD. Bottom. 1.0954. Range break above 1.1151, Below 1.0870, 1.0844, 1.0822. Overbought sell point 1.1046, Failure point 1.1028. Strategy. Longs above 1.1011, target 1.1046 then reverse to 1.1027. Points on the way up, 1.1015, 1.1020, 1.1028, 1.1037, 1.1046.

Shorts below 1.1009, Target 1.0982. Watch here for reversal to 1.1009 and higher. Points on the way down, 1.1000, 1.0991, 1.0983, 1.0975, 1.0968, 1.0954 Bottom. Point 1.0982 must cross to go higher.

Brian Twomey, Inside the Currency Market,

EUR/USD: Present and Future

Last week’s break at 1.1236 and 1.1154 instilled in EUR/USD a fresh downtrend despite not only oversold intraday but a current 1.1010 price historically trading below 15, 20 and 25 year averages from 1.2457, 1.2145 and 1.2221. Draghi’s comment regarding economic risks to the downside was enough to break the rising lines at 1.1236 and 1.1154 but what sealed the downtrend was possible QE extension and an interest rate drop into further negative territory. Currently 13 months after adoption of early 1900’s economist Silvio Gesell’s negative interest rate policies, the only benefit was a lower exchange rate from 1.3900 highs to 1.0400 lows. Inflation from September 2014 and Gesell policy adoption was positive 0.4 August 2014 but dropped to negative 0.2 December 2014, 0.0 by April 2015 and positive 0.1 August 2015.

The larger EUR/USD range is found between 1.0672 and 1.1385. Both lines are dynamic and moving as well as the 3 month forward line at 1.1102. Inside 1.0672 and 1.1385 above lies a dropping line now at 1.1220, a stasis line at 1.1154 and an overall slow moving descending line at 1.1595. On the downside from 1.0672 – 1.1395 exists a big break point in the current vicinity of 1.0895. A break at 1.0895 then EUR/USD heads far lower. Draghi spoke the words of short EUR/USD and its the way forward as long as resistance points above holds.

One pair in the EUR/USD short scenario to watch is EUR/JPY and the break of 132.51 as I still contend a break would force an overall currency market realignment that would last for years as the currency market heads into its new periodic change. The last change was seen with the 2008 crash and lasted now 7 years. The prior periodic change lasted from 1998 – 2008, 10 years. The new change is not only upon us but generally periodic changes in currency market durations are on average 5 – 6 years. A periodic change for the EUR/USD means lower for much longer, possibly years. EUR/JPY is the key.

Brian Twomey, Inside the Currency Market,