EUR/USD V DXY

DXY must break 97.28 to go higher. From 1 and 2 year monthly averages, DXY is ranging between 97.28 – 91.42. The more market oriented range V EUR/USD is found between 97.28 – 94.00. DXY 97.00’s viewed from EUR/USD is found not only many resistance points from averages 1 – 10 years but anything above 97.00 is out of bounds. Good sell point in the 97.00’s and that includes all USD/Other pairs. Above 97.00 offers, 98.39, 98.41, 98.62. To see 98.00’s, EUR/USD must trade at least 1.1044 while DXY at 93.99 means EUR/USD will trade between 1.1456 – 1.1612. DXY 97.00’s resistance points 97.02, 97.23, 97.28, 97.37. Longer term DXY is oversold short term from averages 1 – 3 years and overbought from averages 5, 7 and 10 years. DXY is more overbought than is EUR/USD oversold as DXY is the driver.

Overbought in DXY and oversold in EUR/USD is especially seen in the Regression relationships. Last 2 months, DXY was at 166 Vs EUR/USD minus 34, This month, DXY is located at 152 V EUR/USD minus 50, a 16 V 14 point difference. The best both prices in DXY and EUR/USD can achieve is Minus 72 EUR/USD and DXY 1.66 – 1.36. Over time, EUR/USD could easily hit 102 and DXY 168 as averages. What this means is not only more continued ranges short term but slow slow price grinds while EUR/USD has potential to travel higher. Regression confirms pretty much a 300 range. It confirms 97- 98 DXY as top and EUR/USD bottoms for now at 1.1008, 1.0978 and 1.0932. From DXY 95.99, EUR/USD tops are located at 1.1312, 1.1336, 1.1209. The DXY V EUR/USD averages at 1 and 10 year are severely misaligned. This conundrum adds to the slow 15 point move over 1 month in the Regression line. Now maybe a good time to look further at GBP as GBP/USD is in the process of a Re Correlation to its currency pairs. GBP/AUD, GBP/NZD, GBP/CHF and GBP/JPY all Correlate in the 80 – 90% range yet most important pair GBP/CAD still fails Correlations at Negative 0.07. If GBP/USD and GBP/CAD fail then warning exists in GBP.

EUR/USD V DXY from EUR/USD 1.1225, Means and Ranges.

1 Year Mean 96.22, Range above 97.71, Below 94.72
2 Year mean 96.10, Range above 97.26, Below 94.93
3 Year Mean 95.98, Range above 97.23, Below 94.72
5 Year Mean 95.12, Range above 97.37, Below 92.86.
7 Year Mean 93.86, Range Above 96.35, Below 91.36
10 Year Mean 93.56, Range Above 96.03, Below 91.08.

EUR/USD V DXY from EUR/USD 1.1044, Means and Ranges.

1 Year Mean 97.13, Range Above 98.62, Below 95.63
2 Year mean 97.23, Range Above 98.39, Below 96.06
3 Year Mean 97.16, Range Above 98.41, Below 95.90
5 Year Mean 96.36, Range Above 98.61, Below 94.10
7 Year Mean 95.59, Range Above 97.99, Below 93.00
10 Year Mean 94.55, Range Above 97.02, Below 92.07

DXY V EUR/USD, From DXY 95.99, Means and Ranges

1 Year Mean 1.1172, Range Above 1.1336, Below 1.1008
2 Year Mean 1.0841, Range Above 1.1024, Below 1.0658
3 Year Mean 1.1122, Range Above 1.1312, Below 1.0932
5 Year Mean 1.1619, Range Above 1.1934, Below 1.1304
7 Year Mean 1.1378, Range Above 1.1755, Below 1.1001
10 Year Mean 1.0790, Range Above 1.1209, Below 1.0371

DXY V EUR/USD from DXY 93.99, Means and Ranges

1 Year mean 1.1292, Range Above 1.1456, Below 1.1128
2 Year mean 1.1161, Range Above 1.1344, Below 1.0978
3 Year Mean 1.1422, Range Above 1.1612, Below 1.1232
5 Year Mean 1.1879, Range Above 1.2194, Below 1.1564
7 Year Mean 1.1658, Range Above 1.2035, Below 1.1281.
10 Year Mean 1.1110, Range Above 1.1529, Below 1.0691.

EUR/USD Rough spots overall, sell points 1.1300’s – 1.1600’s, Below look to 1.0900’s as Long points.

DXY 97.00 – 98.00 Sell, Long 92.00 – 94.00

Brian Twomey, Inside the Currency Market, btwomey.com

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