EUR/USD: Levels, Ranges, Targets

Since June 2014, Draghi cut to zero then negative 4 times, and 40 basis points in cuts, 30 to count negative alone. This is the same as saying 30% went negative, a bit higher then a 1/4 point cut. This situation is not terrible yet these cuts occurred fast and time must exist to reflect negative cuts in the markets. Currently they are not seen. But this situation will give EUR a slow downward path. Why Draghi said no more cuts is because he will hurt the Swiss, Denmark, Sweden and Norway. The Swiss will be hurt the most, followed by Denmark. Norway will be hurt the least. Japan doesn’t count yet, yet. Both are facing literally zero interest rates which is bottom at the negative point. Negative can only go to 0.0, Swiss and Denmark are close. EUR/DKK is pegged so makes their situation dire due to intervention money spent. Good possibility Denmark cuts again while the Swiss are okay and don’t have a need to move again. The Swiss are actually well positioned as they saw this coming long ago. They were extraordinarily smart. By the way, Negative rates are here to stay for a long, long time in the future. More Central banks will now go negative.

EUR/USD. Correct to say EUR had to break its range in a big way. It cannot handle higher, it must come lower by current metrics but it must come lower by recent cuts. This takes time. How fast must be monitored due to big changes slated for July them must assess what the ECB is up to. I will know in a couple days.

My systems are down for the day so quick assessments here only. Pip ranges today 54 total, 17 pips short term. Targets are 1.1134. Point at 1.1175 is out of bounds. Look for sell here. Big points on the way up 1.1104, 1.1125, 1.1186 is descending. A top remains and its extraordinarily strong. Continue sell rallies. Range point below 1.0764, above 1.1201. Caution, targets and ranges are extremely close but not perfectly accurate as normal.

Brian Twomey, Inside the Currency Market,