EUR/USD: Levels, Ranges, Targets

Posted Fxstreet.com,

EUR/USD 2nd Trade Idea, Friday afternoon,

EUR/USD price this morning surpassed the Failure point at 1.1416 and broke the morning range at 1.1438. Price jumped from reported point 1.1397. Price dead stopped at 1.1459, 1 pip shy of reported 1.1460 and well short as expected of reported overall target 1.1472.

Reversal target as mentioned at 1.1430’s hit 1.1436. The nasty price point saw 1.1434 dead stop as mentioned and rest. Some days, price curves are Picasso perfect without mystery while other days, price struggles exist. The point at 1.1434 was that point, its was a trap level.

Some days price points run even, other days uneven. The level at 1.1434 was that level at actual 1.14345. What it means is 1.1435 or 1.1433 served the purpose. Most Exchange rates actual are 6 places on the right side of the decimal not 4 as seen.
What was witnessed this morning in terms of ranges, targets and reversals, bottoms and tops, trade able points, no longer counts. Its old news and no longer valid.

The new setup below. Explanations viewed in last post for new or interested readers.

EUR/USD. Bottom. 1.1382, + 54 pips from this morning 1.1328. New range points above 1.1851, 1.1704,1.1544.
New Ranges below 1.1336, 1.1181, 1.1043. Most important overall 1.1336, its revolving from 1.1331 – 1.1336 all week.

Targets above 1.1523, Failure point 1.1466. Target met at 1.1523, sell reverse to 1.1481. Target met at 1.1466, sell reverse to 1.1453. Trade Able points on the way up, 1.1447, 1.1453, 1.1466, 1.1474, 1.1484, 1.1495, 1.1523.

Shorts below 1.1438, Target 1.1410, 1.1396, 1.1382 Bottom. Trade able points on the way down, 1.1428, 1.1424, 1.1418, 1.1411, 1.1396, 1.1382 Bottom.

Brian Twomey, Inside the Currency Market bwomey.com

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USD/ASIA: 9 Currency Pairs

As prices break vital points, take the breaks.

USD/IDR From current 13,190.0, rests well below 13332.57 and 134.13.06, Watch 50 day average 13168.59

USD/INR current 66.40, just broke 66.57 and 67.30

EUR/INR Current 75.3990, Big supports below 74.7553, 74.7125, 73.4937, 72.86.

USD/KRW Current 1137.46, just broke below vital points 1160.88, 1188.38, Below 1108.16, 1107.23, 1100.63

USD/MYR current 3.8840, Big breaks above 4.0199, 4.1150, below 3.3790, 3.3655

USD/PHP Current 46.763, Above 47.03, below 46.72 and 45.96

USD/RUB Current 64.7010, Just broke big points 68.1697, 72.8102

USD/SGD Current 1.3449, Above 1.3652, 1.3693 and 1.3893. Below 1.2877.

USD/THB Current 34.993, Above 35.2819, 35.4884, Below 33.45, 32.71, 32.14

Brian Twomey, Inside the Currency Market, btwomey.com

Yields, Interest Rate Spreads, 10 Currency Pairs

Published fxstreet.com, Front Page

Yield, Interest Rate Spreads and 10 Currency Pairs

The Eonia / Fed funds spread remains again today 0.28 while USD / German 2 year yields currently factors 0.314 and the USD/German 10 year at 1.613. Overall, 1.33 spread.

Japan Call Rates V Fed Fund spreads trade 0.57 , 0.067 as USD / Japan in the 2 year and 0.94 in 10’s. Overall spreads 0.87.

In the UK, Sonia V Fed Funds trade 0.09, USD V UK 0.27 in the 2 year and 0.25 in the 10 year. Overall spread 0.16.

CAD Corra V Fed Funds trades 0.15, 0.14 as USD / CAD in the 2 year and 0.25 in 10’s. Overall spread 0.10.

As 2008 Keynesian stimulus met and defeated Supply Side economics, the end result is found above by a massive power shift as central banks added and subtracted daily money to maintain the free price system under Supply Side practices to full price and market control under Keynes. It explains why the intent focus on central bank policies, speeches and Forward Guidance. Yet the central banks failed to shoot one straight arrow in eight years.

The interesting difference between Keynes this time around and 1930’s – 1971 free float is Keynes was practiced previously under Gold Standards and a fixed price system as Gold was Fixed. A few currency pairs highlighted by vital break points for consideration.

CAD/ZAR remains inside its ranges between 11.50 – 11.32, an 18 pip range vs a 6 pip range yesterday.

EUR/JPY broke a big point at 124.29 to trade at current 122.00.

EUR/CAD remains inside a 1.3919 – 1.4348 range.

EUR/NZD at current 1.6225 rests above next vital break at 1.6222 and ranges inside 1.6222 – 1.6482.

EUR/CHF at 1.0969 also rests just above big break points at 1.0956 and 1.0938. Extreme price pressures are building inside EUR/CHF as a hughe breakout is on the way.

EUR/AUD from current 1.4819 rests comfortably below 1.4922, 1.5135 and 1.5172.

EUR/GBP from 0.7755 is stuck inside 0.7773 above and 0.7739 and 0.7647 below.

USD/CAD from 1.2556 also rests just above vital supports below at 1.2289 and 1.2149.

USD/CHF from 0.9683 currently, above point breaks are located at 0.9766, 0.9865 and below at 0.9296.

USD/JPY ranges remain wide at 104.09 below and 110.32 above.

USD/NOK from current 8.1518 trades just below bitg point break at 8.3431.

Brian Twomey, Inside the Currency Market, btwomey.com

EUR/USD: Levels, Ranges, Targets

The magic words spoken by central banks is CPI as the prime economic indicator since the start of time is falling and will head lower. GDP is already reflected. How is it all CPI and GDP fall together in the same locations from nation to nation, and all at the same time. How is it exchange rates all move together at the same time and land in the same locations. Only I figured it all out and its why I don’t have ability to read another commentary from market people. Someday I will write it all. All would be in shock how this stuff really works.

We don’t have trends on our hands, we have price reactions to data and price waiting for direction.

Vital points today, above 1.1616, 1.1518, 1.1438, 1.1376, 1.1350- 1.1359, Below 1.1331, 1.1254, 1.1225, 1.1204, 1.1181, 1.1133. Most important for shorts 1.1331. This line 1.1331 is solid.

Bottom. 1.1291. Range above 1.1524, 1.1366. Below 1.1331 and 1.1176, Target 1.1442, Failure point 1.1385. Target met at 1.1442, sell to 1.1396, target met at 1.1385, sell to 1.1368. Points on the way up, 1.1352, 1.1358, 1.1367, 1.1385, 1.1391, 1.1415, 1.1443.

Shorts below 1.1331, target 1.1311, 1.1291 Bottom.

Brian Twomey Inside the Currency Market, btwomey.com

Risk On, Risk Off Currency Markets: CAD/ZAR, AUD/CAD, EUR/JPY, CAD/JPY

Posted at fxstreet.com, second post.

Risk On or Risk Off Currency Markets: CAD/ZAR, AUD/CAD, CAD/JPY, EUR/JPY.

To determine not only the health of currency and all markets in general in terms of risk on and risk off exposures, four preeminent pairs were designed as forward indicators to assess the type of markets traded currently and possibilities for the future. Not only are the general risk on , risk off scenarios established as insights into other currency pairs but the four pairs serve as considerations into the commodity complex. The four pairs are CAD/ZAR, EUR/JPY, AUD/CAD and CAD/JPY.

CAD/ZAR. The ultimate risk determinant pair because it shares constantly perfect negative correlations to EUR/USD. CAD/ZAR trades currently at 11.43 and big breaks are found at 11.49 and 11.31. Overall CAD/ZAR rests on solid support at 9.2212. Intraday, 11.49 and 11.31 decides long and shorts as prices inside the range is risk neutral. Until 9.2212 breaks, risk off markets not only dominates the current trading condition but any rises in risk currency pairs or risk financial instruments are corrections.

EUR/JPY. Big intraday breaks are found above at 126.34 and 126.38 and 124.28 below. EUR/JPY failed to break higher after Fed statement release. Current risk is neutral inside the 124.28 – 126.34 range. Why EUR/JPY as a forward indicator is due to its multi decade distinction as the most widely traded cross among every cross pair on the planet. The number two pair is a far distant second.

AUD/CAD. From current price at 0.9568, the next breaks below are 0.9549 and 0.9429 then above at 0.9817 and 0.9893. Price trades inside the range and the neutral condition conforms perfectly to the same assessments as CAD/ZAR and EUR/JPY, risk neutral. Release of Fed statement experienced no breaks in the ranges.
CAD/JPY. From current price at 88.49, vital breaks are located at 89.12 and 90.12 above and 86.33 below. Release of Fed statement again failed range breaks.

Four of the most prominent financial instruments ever traded reveals the current market both intraday and longer term trades in classic risk neutral positions. The market order lacks trends and range trading is the preferred method until risk pairs break neutrality.

Brian Twomey, Inside the Currency Market, btwomey.com

AUD/USD: Levels, Ranges, Targets

AUD/USD. Bottom. 0.7554. Ranges above 0.7669, 0.7721, 0.7757, Ranges Below 0.7517, 0.7465, 0.7432. Target 0.7652, Failure point 0.7639.
Target met at 0.7652, sell to 0.7622, Target met at 0.7639, sell to 0.7616. Points on the way up, 0.7604, 0.7613, 0.7610, 0.7617, 0.7621, 0.7630, 0.7639, 0.7645, 0.7652. Price above 0.7652 based on Yellen, then sell.

Shorts below 0.7591, target 0.7572, 0.7563, 0.7554 Bottom.

Brian Twomey, Inside the Currency Market, btwomey.com

EUR/USD: Levels, Ranges, Targets

DXY as a currency is oversold yet DXY yields and Fed Funds are overbought. Most overbought is Fed Funds. DXY lacks ability to travel anywhere while EUR/USD remains at the mercy of DXY. Yet the EUR/USD top is prominent for many days. Deep inside EUR/USD price is a clear range condition. Despite the top, EUR/USD isn’t ready to thrust downwards. Nor can EUR handle any far upsides. But we have Yellen today and her tired old Keynesian “I’m incompetent mantra” and her stubborn I won’t reduce the balance sheet to assist the economy. First of the month closes, we’ll look closer at EUR/USD and DXY together and determine what’s happening.

Most vital break points above 1.1564, 1.1469, 1.1389, 1.1337, 1.1328, 1.1311, 1.1302 – 1.1305, Below vitals 1.1268, 1.1208, 1.1185, 1.1161, 1.1134, 1.1088.

EUR/USD Bottom. 1.1246. Range above 1.1584, 1.1494, 1.1337, Below ranges 1.1268, 1.1114, 1.1028. Target 1.1393, Failure point 1.1335. Note 1.1337 range point. Target met at 1.1393, sell to 1.1348, Target met at 1.1335, sell to 1.1319. Target at 1.1393 achieves Max 92 pip daily range. caution longs. Top here, further caution longs. Points on the way up, 1.1306, 1.1311, 1.1319, 1.1335, 1.1342, 1.1354, 1.1364, 1.1393.

Shorts Below 1.1302, target 1.1274, 1.1260, 1.1246 Bottom. Points on the way down, 1.1290, 1.1282, 1.1278, 1.1276, 1.1261, 1.1246 Bottom. Longs must cross 1.1274 to head long again.

Brian Twomey, Inside the Currency Market, btwomey.com

FXSTREET.COM First POST FED Preview

Published in: Inside the Currency Market
Fed Preview: GDP, Yield Curves, Fed Funds, DXY
Brian’s Investment Wed, Apr 27 2016, 04:56 GMT
by Brian Twomey | Brian’s Investment
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A sincere and distinguished honor for not only the many dedicated professionals at fxstreet to recognize my contributions but a privilege to be surrounded by respected and able market specialists worldwide. I’m Brian Twomey and view myself as a market and FX professional since I began trading currencies in early 2004. I appeared in public upon the 2012 publication of Inside the Currency Market. My posts are varied to remain ahead of the curve as they consists of FX trades, yield curves, interest rates, fundamental data, special reports, address issues of the day. My trading systems and trades consist of nation Interest rates and interest rate based as well as an arsenal of 476 currency pairs backed by more Statistics than any one trader would ever need in any given lifetime. Thank you and respectfully, Brian Twomey

Fed Preview: GDP, Yield Curves, Fed Funds, DXY

GDP last at 0.9% and 0.7% expected is fairly consistent with my own forecasts at highs from 0.86 to 0.50 lows. The specially designed moving averages dating to Q1 1990 reveal GDP trades below every average from 1 to 10 years. The nearest average to cross above is located at 2.31 followed by 2.44. Normally what is seen quarter to quarter among the averages is an overbought or oversold situation but not this quarter as 0.9 rests just below every average. The averages must rise or GDP must dive in order for oversold conditions to appear. What is expected this quarter is more economic underperformance.

The 2 year yield from the 0.865 close may trade above every monthly average from 1 – 7 years but its overbought and becomes more overbought further out in years. The 5 year average at 0.438 is most overbought. The nearest break below and warning to lower for longer is found at the 1 year average at 0.765. The most vital break above is the 10 year average at 1.350. The overall range is then 0.765 to 1.35. Targets among the averages range from 0.806 to 0.643. Since the 2008 crisis, the 2 year yield ranged between 0.20 to 0.90 and lows not seen since at least prior to June 1976. The noted point is the data set stopped June 1976.

The 10 year yield at the 1.94 close trades below every average from 1- 10 years. The 1 year average at 2.07 is the next break followed by a cluster at 2.134, 2.139, 2.149, 2.171 and 2.176. The breakout point is found at 2.97. Targets range from 1.90 – 1.76. Since 1.94 lies just below all averages, current price is not overbought nor oversold. From the 2008 crisis, the 10 year traded inside a 0.20 – 0.90 range.

The 30 year yield from the 2.754 close also trades below every average from 1 – 10 years. The next break occurrs at 2.864 followed by 2.896, 2.901, 3.060, 3.075 and 3.133. Targets range from 2.625 – 2.80. When last 4.0 was seen from monthly averages was July 2011. Current 2.75 was last seen prior to 1977.

Yield spreads from 10 to 2 based on closes trades at current 1.071. From 1 and 2 year averages at 1.30 and 1.50, ranges vary from 1.30 – 1.95 and mid points at 1.643. The 10 and 30 spreads from closes trades 0.81 and above the 1 and 2 year averages at 0.79 and 0.745. Next point above is found at 0.826 within the overall range from 0.745 – 0.968. The mid point is found at 0.846. Basis points based on mid points are located at 84 v 0.0164. The 1.88 level based on 30 and 2 spreads from closes are below the nearest 1 year monthly average at 2.09 then 2.24 and 2.58. The mid point is 2.50.

Fed funds at 0.37 is above every average from 1 – 7 years yet well below the 10 year at 1.143. The close at 0.37 hardly moved 1 basis point on a close basis since December 16, 2015. The averages failed to maintain pace with current Fed Funds rises therefore 0.37 is not only extremely overbought but any rises cannot hold nor sustain higher levels. Further, peaks are seen at twice normal limits. The nearby average below is 0.224 then 0.162 and 0.140. The position of Fed Funds at current levels is unsustainable. The notion Yellen can or should raise is a highly questionable assumption.

The DXY was about 97.00 at the Fed’s March meeting and since dropped 300 pips to current 94.45. DXY rests just below on vital supports at 92.74, 88.85, 85.03 and 83.41. The current range is 97.12 – 92.74 and the averages are oversold. Despite oversold, yields, Fed Funds and recent data as well as a poor GDP print expected fails to allow DXY to rise. EUR/USD finds itself in the same position as poor recent data and an Eonia cut fails to sustain a higher Euro. What favors EUR/USD over DXY is the positive Eonia V Fed Funds 0.28 spread. DXY nor EUR/USD is ready to travel higher and range trading is expected.

Published On Wed, Apr 27 2016, 05:00 GMT Previous entries of Inside the Currency Market
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Brian Twomey
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Brian Twomey is embarking on his twelfth years in currencies and various trading accounts, both for his own and others. Inside the Currency Market: Mechanics, Valuation and Strategies”, John Wiley / Bloomberg Press November 2011.
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FED Preview: DXY, Yields, GDP

First Post at fxstreet.com, on Brian Twomey author page, acclimating to the system, we’ll see

A sincere and distinguished honor for not only the many dedicated professionals at fxstreet to recognize my contributions but a privilege to be surrounded by respected and able market specialists worldwide. I’m Brian Twomey and view myself as a market and FX professional since I began trading currencies in early 2004. I appeared in public upon the 2012 publication of Inside the Currency Market. My posts are varied to remain ahead of the curve as they consists of FX trades, yield curves, interest rates, fundamental data, special reports, address issues of the day. My trading systems and trades consist of nation Interest rates and interest rate based as well as an arsenal of 476 currency pairs backed by more Statistics than any one trader would ever need in any given lifetime. Thank you and respectfully, Brian Twomey

Fed Preview: GDP, Yield Curves, Fed Funds, DXY

GDP last at 0.9% and 0.7% expected is fairly consistent with my own forecasts at highs from 0.86 to 0.50 lows. The specially designed moving averages dating to Q1 1990 reveal GDP trades below every average from 1 to 10 years. The nearest average to cross above is located at 2.31 followed by 2.44. Normally what is seen quarter to quarter among the averages is an overbought or oversold situation but not this quarter as 0.9 rests just below every average. The averages must rise or GDP must dive in order for oversold conditions to appear. What is expected this quarter is more economic underperformance.
The 2 year yield from the 0.865 close may trade above every monthly average from 1 – 7 years but its overbought and becomes more overbought further out in years. The 5 year average at 0.438 is most overbought. The nearest break below and warning to lower for longer is found at the 1 year average at 0.765. The most vital break above is the 10 year average at 1.350. The overall range is then 0.765 to 1.35. Targets among the averages range from 0.806 to 0.643. Since the 2008 crisis, the 2 year yield ranged between 0.20 to 0.90 and lows not seen since at least prior to June 1976. The noted point is the data set stopped June 1976.

The 10 year yield at the 1.94 close trades below every average from 1- 10 years. The 1 year average at 2.07 is the next break followed by a cluster at 2.134, 2.139, 2.149, 2.171 and 2.176. The breakout point is found at 2.97. Targets range from 1.90 – 1.76. Since 1.94 lies just below all averages, current price is not overbought nor oversold. From the 2008 crisis, the 10 year traded inside a 0.20 – 0.90 range.

The 30 year yield from the 2.754 close also trades below every average from 1 – 10 years. The next break occurrs at 2.864 followed by 2.896, 2.901, 3.060, 3.075 and 3.133. Targets range from 2.625 – 2.80. When last 4.0 was seen from monthly averages was July 2011. Current 2.75 was last seen prior to 1977.

Yield spreads from 10 to 2 based on closes trades at current 1.071. From 1 and 2 year averages at 1.30 and 1.50, ranges vary from 1.30 – 1.95 and mid points at 1.643. The 10 and 30 spreads from closes trades 0.81 and above the 1 and 2 year averages at 0.79 and 0.745. Next point above is found at 0.826 within the overall range from 0.745 – 0.968. The mid point is found at 0.846. Basis points based on mid points are located at 84 v 0.0164. The 1.88 level based on 30 and 2 spreads from closes are below the nearest 1 year monthly average at 2.09 then 2.24 and 2.58. The mid point is 2.50.

Fed funds at 0.37 is above every average from 1 – 7 years yet well below the 10 year at 1.143. The close at 0.37 hardly moved 1 basis point on a close basis since December 16, 2015. The averages failed to maintain pace with current Fed Funds rises therefore 0.37 is not only extremely overbought but any rises cannot hold nor sustain higher levels. Further, peaks are seen at twice normal limits. The nearby average below is 0.224 then 0.162 and 0.140. The position of Fed Funds at current levels is unsustainable. The notion Yellen can or should raise is a highly questionable assumption.

The DXY was about 97.00 at the Fed’s March meeting and since dropped 300 pips to current 94.45. DXY rests just below on vital supports at 92.74, 88.85, 85.03 and 83.41. The current range is 97.12 – 92.74 and the averages are oversold. Despite oversold, yields, Fed Funds and recent data as well as a poor GDP print expected fails to allow DXY to rise. EUR/USD finds itself in the same position as poor recent data and an Eonia cut fails to sustain a higher Euro. What favors EUR/USD over DXY is the positive Eonia V Fed Funds 0.28 spread. DXY nor EUR/USD is ready to travel higher and range trading is expected.

Brian Twomey, Inside the Currency Market, btwomey.com

GBP: GDP Forecast

After calculating a number of GDP forecasts this week, commonalities appear. What’s driving any positive GDP forecast is found at the longest term averages. Shorter term averages for DXY, NZD and GBP all calculate negative. The best of the forecasts are DXY as the target range is found between 0.50 – 0.86. The UK range is found between 0.22 – 0.91 yet 0.40 is expected as the consensus forecast. What I see is the possibility 0.4 may print higher to something in the vicinity of 0.54. Why? Viewed from the DXY range at 0.7 forecast, 0.7 falls dead in line within the range at the longer term averages. Sometime quarters factor perfectly and even perfect targets can achieve but this quarter is tough. All GDP averages are below current forecasts from 1 – 10 years.

A print higher than 0.4 sends GBP/USD higher but GBP overall on any rises is corrections within a larger downtrend. GBP/USD must break 1.4452 to head higher. Below 1.4291 holds current price from further falls.

Brian Twomey, Inside the Currency Market, btwomey.com

EUR/USD: Levels, Ranges, Targets

Chart traders are best served today and days ahead by monthly time frame views since its the location of the trigger that drives currency pair prices in passed days, today and will drive prices for the remainder of the week, at least. For interested, trades, fundamental data, special reports will post at fxstreet.com. Again I thank Brother Dale ‘Friend of Forex” Live Analysis Room fxstreet.com, Francesc, Goncalo and the able professionals located inside Fxstreet whose responsibilities ensure the timely daily running of fxstreet.

Future posts coming, EUR/USD V DXY, CAD and Oil drivers. CAD is quite interesting as I viewed many oils to determine exact CAD drivers. WTI is a tiny part of the story yet it also violates the principles to follow another financial instrument in relation to currency prices.

The top in EUR/USD remains, caution longs, not recommended.

EUR/USD. Bottom. 1.1213. Big break points today above 1.1528, 1.1433, 1.1355, 1.1295, 1.1282, 1.1279, 1.1271. Below 1.1173, 1.1153, 1.1127, 1.1102, 1.1058. Ranges above 1.1586, 1.1478, 1.1321, Below ranges, 1.1218, 1.1065, 1.0962. Break points serve for the day, range breaks serve message to future price direction. Target 1.1362, Failure point 1.1302, wide variation, caution. Target me at 1.1362, sell target 1.1316. Target at 1.1302, sell target 1.1286. Points on the way up, 1.1274, 1.1286, 1.1294, 1.1302, 1.1309, 1.1320, 1.1332, 1.1362. Look for failure and sell point in the 1.1302 – 1.1309 vicinity.

EUR/USD Shorts below 1.1268, Target 1.1240, 1.1226, 1.1213 Bottom. Points on the way down 1.1266, 1.1261, 1.1250, 1.1243, 1.1228, 1.1213 Bottom.

Brian Twomey, Inside the Currency Market, btwomey.com

RBNZ: Economic Preview and NZD/USD

New Zealand GDP in Q4 was up 0.9% but in monthly average terms, GDP trades under each accurately predictable and specially designed averages dating to Q1 1990. The big number to beat is the 3 year average at 1.81 then the 2 year at 2.24 and 4 year at 2.30. Despite a healthy +2.5% increase in construction as reported by Statistics NZ, Agriculture was down 1.7% and Fixed Asset Investments were also down 1.1%. Exports were positive 0.3% yet Imports were + 0.7%. Nothing out of sync is found in the averages except a meandering GDP price level not overbought or oversold. The averages however are dropping.

New Zealand Overnight Cash Rate at current 2.21 price is also below every monthly average from 1- 10 years for a total of 10 averages. When the RBNZ raised OCR from 2.50 to 3.00, the point at 3.0 traded just above the 20 year average at 2.86. The Knut Wiksell 1898 theory of an interest rate above a 20 and 25 year average is an economy trades at its equilibrium point. At OCR 2.21, New Zealand trades well below equilibrium. The nearest average to beat is the 7 and 5 year at 2.67 and 2.69. Then next comes the 6 year at 2.70 and 4 year at 2.76. Despite oversold averages, 2.67 and 2.69 lack ability to break based on targets. The best target above is 2.60. Targets range from 1.59 – highs at 2.60. More economic under performance is slated for the future.

The 10 and 2 year yield spread currently trades at 0.76 and far below April 2014 highs at 0.95. The April 2014 – April 2016 range trades between 0.52 – 0.95. January, February, March and April 2015 saw dips to 0.13, 0.17, 0.23 and 0.22. April 2011 experienced highs since January 2010 at 2.05. Current yield spreads historically since NZD 1980’s free float remain on the floor.

Inflation at 0.2 as well trades below 8 specially designed averages dating to Q1 1990. The highest average and overall numbers to rise above are found at the 4 and 5 year averages at 0.63 and 0.62. The next vital points above are located at 0.30, 0.32 and 0.40. The most important number above is found at 0.50. Any future rises in Inflation are corrections inside a large downtrend.

NZD/USD Correlates to EUR/USD at 95% yet both EUR/USD and NZD/USD negatively correlates to EUR/NZD at minus 75% V EUR/USD and minus 92% V NZD/USD. NZD/EUR correlates to NZD/USD at + 92%. Topside point ranges in NZD/USD are located at 0.6955 and 0.6897. Bottoms are found at 0.6839 and 0.6790. The bigger picture in NZD/USD is a vital break point above is found at 0.7071. Below 0.6685 and 0.6798 hold current prices from significant downsides. Intraday, NZD/USD trades at top of its ranges.

EUR/NZD big break points above are located at 1.6481, 1.6590 and below 1.6224. Intrady top is found at 1.6460 and below 1.6331. For NZD/EUR big break points intraday translates to 0.6123 and 0.6075. Overall big breaks are found at 0.6177 above and below 0.6069 and 0.6029.

Brian Twomey, Inside the Currency Market, btwomey.com

WTI:

WTI at the peak of the 2008 crisis traded about 140.20 January 2008 then dropped to 41.68 lows by January 2009. WTI then corrected to 113.93 January 2011, 107.07 January 2012 and 107.65 January 2013. The last drop occurred again in January 2014 from 105.37 to roughly 33.78 lows. When long and short term monthly averages were last viewed, the situation was clear: the trading range and major break points were located between 42.00 to 47.00. The current trading range is the same today but the position of the longer term averages 20 – 30 years completely reversed. Monthly Cushing averages in the further analysis was viewed yearly from 1 – 30.3 years for a total of 31 averages.

When WTI corrected from the 41.68 lows, the multi year trading range occurred between 71.92 – 113.03 highs. The distribution of averages especially the longer term averages was correct and transparent: Longer term averages were found at the top while shorter term averages were located below. Because of the last drop from 105.37 to 33.78 lows and because of the length of time price remained on the floor, longer term averages from 20 – 30 years reversed. Longer term averages today are located between 2 – 10 years but most specifically at the 3 year at 74.85, 4 year at 79.13 then comes the 82.81 upper most average at the 6 year. Current 44.73 price is found by climbing the misaligned system of averages until the 30 year average is located.

The current price at 44.73 trades below every average from 1 – 28 years yet the trading range is found between the 24 – 30.3 averages from 42.79 at the 30.3 year – 48.91 at the 24 year. Why current price trades at 44.73 inside a 53.73 – 33.73 June contract range and the 30 year average is because price on a correction higher lacks another location to trade. The climb higher for WTI is massive as a higher price must clear many lower averages.

To target WTI 60 for example, hurdles must clear above beginning at the 27 year at 45.91, 26 year at 46.89, 25 year at 47.78, 24 year at 48.91, 23 year at 50.13, 22 year at 51.63, 21 year at 53.23, 20 year at 54.95, 19 year at 56.63 and 18 year at 58.73. To target WTI 70, previous averages must clear and the 17 year at 61.38, 2 year at 62.77, 16 year at 63.76, 15 year at 66.00 and 14 year at 68.98. The hurdles ahead may also explain why contract volume declined to 837,000 Friday from 1.6 million highs April 8th, April 12 and 1.4 April 13th.

To head higher, current 44.73 must clear the 1 and 28 year averages at 44.86 and 44.84 then the 27 year at 45.91, 26 year at 46.89, 25 year at 47.78, 24 year at 48.91, 23 year at 50.13 and 22 year at 51.63. To head lower, the 29 year must break at 43.96, 30 year at 43.00 and 30.3 year at 42.79. A 50% Fibo is located at 62.80. The averages driving prices higher are the distant averages found between 1 – 10 year beginning at the 6 year, 7 year, then the 5 year, 8 year, 9 and 10 year. As prices climb closer to averages, price becomes less oversold.

As prices rise closer to averages from current levels, ranges compress particularly between the 17 – 18 year averages at 61.38 and 58.73 then between the 7 and 8 year averages at 81.06 and 81.65. Total averages align as 1- 10 years are distant averages then 11- 20 begin the march to current prices and 20 – 30.3 are closest averages to current price.

Upper targets to align the distribution are found between the 3 – 13 year averages from 48.15 – 61.33. Lower targets range from 13.40 – 42.53 from averages 14 – 29 years. Of 31 averages, 10 averages target higher prices while 17 averages target lower and far lower prices. What assists the case for lower prices are significant peaks seen in 17 of 31 averages. As a spot check of lower prices from current 44.73, price reaches extreme oversold from 11.49 – 18.38.

Current WTI is in correction phases from the last 105.37 highs then 107.65, 107.07, 113.93 and overall from the 2008 highs at 140.20. The overall trend is down as further averages adjust over time to see far lower prices.

Brian Twomey, Inside the Currency Market, btwomey.com

GBP/CHF, GBP/CAD, GBP/NZD

Just running through to report and view major break points going back to 1999. Take the breaks as reported.

GBP/CHF. 1.4618, 1.4120, 1.4058,

GBP/CAD 1.8929, 1.8093

GBP/NZD 2.1396, 2.1217, 2.0341

GBP/USD and GBP/JPY reported last posts

Brian Twomey, Inside the Currency Market, btwomey.com

9 JPY Cross Pairs: MXN, SEK, NOK, INR, Majors

Common them among all JPY cross pairs is every cross pair arranged as Other pair / JPY rests on big huge support points. The exclusion is INR/JPY but likewise also sits on big supports. Do or die for JPY crosses. Take the breaks as outlined.

GBP/JPY: 155.05 and 151.28 below and above 162.47, 163.15, 167.70.

AUD/JPY: 89.05, 87.69, 87.41, 84.73, 84.47, 83.22, 81.27

NZD/JPY: 76.81, 76.53, 76.21, 74.41, 73.86.

CAD/JPY: 89.13, 88.26, 87.46, 85.71, 84.02

CHF/JPY; 115.50, 115.49, 106.00

JPY/INR; 0.5959, 0.5929, 0.5903,

SEK/JPY; 14.24, 14.19, 13.90, 13.81, 13.62, 13.59, 13.54

MXN/JPY; 7.34, 7.11, 7.07, 6.43, 6.35

NOK/JPY; 15.74, 15.20, 15.03, 13.46, 13.32

Brian Twomey, Inside the Currency Market, btwomey.com

EUR/USD: Levels, Ranges, Targets

Remember warning Top was here, was correct. Remember caution longs, and don’t long EUR. Top remains today, EUR/USD going lower.
Banks Bidding / Selling Euros. Bids: Japan bidding higher for days, BNP Paribas Bidding higher, Barclays bidding higher for days, Banks selling Euros: Mexico selling way lower for days, Greece selling lower for days, Interesting Deutsche Bank switched from Bids way higher to bids way lower. Overall 7 banks bidding higher, 6 banks selling, Remainder banks remain at today’s current bids such as Societe General. Why Deutsche bank switch, Draghi, Mr gloom and doom forecast, Big point Inflation down next couple quarters.

EUR/INR Big point breaks, 74.69, 74.62 from current 75.11, price sits oversold just above big break points. USD/INR big breaks 67.33 and 66.58, price at current 66.49 just broke below

EUR/USD Bottom 1.1238. Big break points today 1.1565, 1.1467, 1.1385, 1.1323, 1.1305, 1.1296, 1.1293, 1.1277. Below big points 1.1171, 1.1146, 1.1126, 1.1203, 1.1081. Range points above 1.1613, 1.1451, 1.1312, Below range points 1.1277, 1.1140, 1.0985. Targets 1.1396, Failure point 1.1331, Note Targets coming down. Points on the way up, 1.1297, 1.1304, 1.1313, 1.1331, 1.1338, 1.1351, 1.1363, 1.1376, 1.1396.

Shorts below 1.1293, Target 1.1265, 1.1351, 1.1239 bottom. Points on the way down, 1.1288, 1.1284, 1.1275, 1.1266, 1.1261, 1.1254, 1.1240, 1.1238 bottom.

Brian Twomey, Inside the Currency Market, btwomey.com

EUR/GBP V GBP/USD V EUR/USD

What drives EUR/GBP is EUR/USD as Correlations factor to 91%. EUR/USD and EUR/GBP lack positive correlations to GBP/USD at minus 75% EUR/USD and negative 95% to EUR/GBP. Viewed as GBP/EUR then GBP/USD aligns as + 95% and is correct.

Not only is EUR/GBP approaching vital point breaks at 0.7784 and 0.7752 but EUR/NZD and EUR/CAD are also at important break points at EUR/CAD 1.4347 and 1.6226 EUR/NZD. EUR/GBP bottoms are located at 0.7831 and 0.7770 then next comes 0.7878, 0.7910, 0.7925 and 0.8019. Further, breaks at 0.7752 targets 0.7645. The big point breaks above are located at 0.7999 and 0.8069. The strategy is short to target 0.7645 on a break of 0.7752.

GBP/USD bottoms are found at 1.4081 and 1.4199. Then next comes 1.4265, 1.4283, 1.4367 and 1.4449. Most important break points are located at 1.4296 below and 1.4401 above. Current price is located at 1.4329 and trades in upper range. To offer context to current prices, GBP/USD trades below every yearly average since January 1999. GBP/USD trades below the 1500 day average, trades below the 16, 15, 10, 7 and 5 year averages. GBP/USD trades below the 1 year average. January 2009, GBP/USD traded 1.3499, lows not seen since 2001 and 1984 – 1986 during the Plaza Accords. Both periods 2001 and 1984 – 1986, GBP/USD experienced first ever 1.1000’s – 1.4000 lows historically dating to 1953. The strategy is GBP/USD lower, target the range lows first at 1.4199 – 1.4081.

EUR/USD. Bottoms are found at 1.1198 and 1.1138 and we begin to experience normalized prices and ranges. Next comes 1.1238, 1.1259 and range tops at 1.1320 and 1.1338. Most important long short break points are located at 1.1202 and 1.1080. Again the strategy and my own personal strategy is EUR/USD much lower over time.

Brian Twomey, Inside the Currency Market, btwomey.com

EUR/USD: Levels, Ranges, Targets

Systems all back on track. Honored to announce I will be writing market features and trades for Fxstreet.com. A special thank you to Brother Dale Live analysis Room fxstreet.com, Francesc, Goncalo and a few others at fxstreet I wish to remain anonymous as they are not seen in public but play an important and vital role in fxstreet operations.

EUR/USD. Bottom 1.1297. Ranges above 1.1563, 1.1389, Below ranges 1.1320, 1.1148, 1.0993. Targets, 1.1449, Failure point 1.1387, watch cluster area 1.1389, 1.1387, good failure point for sells. Target met at 1.1449, sell target 1.1402. target met at 1.1387, target sell 1.1371. Points on the way up, 1.1360, 1.1371, 1.1387, 1.1418, 1.1433, 1.1449.

Shorts below 1.1353, target 1.1325, 1.1311, 1.1297 bottom. Watch 1.1320 range point.

Brian Twomey, inside the Currency Market, btwomey.com

AUD/USD V AUD/CAD V EUR/USD

As Glenn Stevens at the April 5th RBA statement called yet again for a lower AUD/USD, the price dropped from 0.7635 to 0.7486 then in traditional AUD methodology, AUD/USD bolted to recent highs at 0.7828. Current price rests at 0.7806. AUD/CAD likewise dropped from 0.9900 highs to 0.9700 lows then typical AUD/CAD skyrocketed back to 0.9900 highs. EUR/USD sat idle and rangebound to allow AUD/USD and AUD/CAD to perform its price functions. What’s driving AUD are two factors, correlations and the complete overhaul of AUD interest rate markets.

The RBA is extraordinarily late in the revamp of interest rate markets as Europe, Singapore, Malaysia and a long list of central banks not only completed plans but are set to implement interest rate overhauls in respective markets. Overhaul includes either wholesale elimination of interest rate categories such as Europe and adjust interest rate Fixes to volume weighted averages. The Federal Reserve for example implemented volume weighted averages March 1 yet the Fed like the Bank of England lacks ability to overhaul interest rate maturities since the FED and BOE maturities are methodologically set in stone. Set in stone maturities for DXY and GBP means the market oriented character of those currencies remain while the Euro is questionable since European interest rates serve the purpose to fund bank’s market operations. What is known so far regarding AUD is the immediate switch to volume weighted averages, introduction of a risk free interest rate and current maturities remain. The market oriented character of AUD also remains which means AUD price movements prevail.

Why Glenn Stevens lacks ability to drive AUD lower is due to AUD/USD and EUR/USD revolving correlations since January. AUD skyrocketed from 0.7400 lows to 0.7800’s due to minus 98% correlations to EUR/USD. AUD/CAD followed AUD/USD because of positive correlations. Today, EUR/USD, AUD/USD and AUD/CAD are aligned as AUD/USD and EUR/USD share a + 96% correlation, AUD/USD V AUD/CAD + 74% and EUR/USD V AUD/CAD + 69%. Positive correlations means AUD/CAD retains today its traditional role as a risk barometer.

AUD/USD bottoms are found at 0.7411 and 0.7576 then next comes 0.7591, 0.7657, 0.7723 and 0.7741. Current AUD/USD price at 0.7800’s is out of bounds V EUR/USD and AUD/CAD and must fall into range. The strategy is short.

AUD/CAD bottoms are located at 0.9841 and 0.9877. Then next comes 0.9906, 0.9938 and range tops at 0.9971 and 0.9999. Current AUD/CAD price at 0.9885 trades at range tops. The strategy is short with focus on the big break long /short point at 0.9858. The larger range for a longer term view is found above at 1.0015 and 0.9547.

EUR/USD as was seen in other pairs currently trades below its range points. EUR/USD should trade inside 1.1334 – 1.1414 with focus on long/ short point at 1.1374. Despite out of sync range positions, I’m not nor haven’t favored long EUR/USD for many months EUR/USD remains in price adjustment phases from not only the previous eCB cut but past cuts dated to September 2014 when the ECB first went negative interest rates. Topside ranges in EUR/USD both in long and short term averages are compressing however slowly. EUR/USD is heading lower despite a slow, slow grind. I’m more in favor of sell rallies rather than long EUR/USD.

Brian Twomey, Inside the Currency Market, btwomey.com