EUR/CHF V USD/CHF V EUR/USD

What exists in EUR/CHF is the severe misalignment between the current signal price V its noise. The current signal is located at exorbitant levels which means EUR/CHF must move from its present range. Here’s the problem, EUR/CHF correlates V EUR/USD at 0.01% and 13% V USD/CHF which means EUR/CHF is a lost wandering pair without a connection to an underlying pair. Correlations not only explains why the signal is so powerful but it also explains the ranges in EUR/CHF are small and tight.Further, correlations in EUR/USD V USD/CHF run minus 98%.

EUR/CHF ranges V USD/CHF are located at bottoms 1.0893 and 1.0916 and top at 1.0939. Current price at 1.0976 is out of range. EUR/CHF ranges V EUR/USD are located at bottoms 1.0897, 1.0920 and top at 1.0943. Current price at 1.0976 is out of range V EUR/USD and USD/CHF.

The only manner to view EUR/CHF is EUR/USD V EUR/CHF. Then out of range boundaries are better known. The bottom range is found at 1.1051, 1.1199 and 1.1347. The most vital points for EUR/CHF are located at 1.0912 and 1.0945. Current EUR/CHF is overbought intraday, oversold long term but not to any great degree. Higher EUR/CHF flys, more overbought intrady price becomes. Part of the oversold explanation is found from lingering effects when the SNB relieved EUR/CHF of the 1.2000 floor. The effects of the SNB’s decision will be felt for many years to come as longer term averages normalize to current price.

The end result for EUR/CHF is it remains a lost pair as no correlations exist and EUR/USD correlates negatively to USD/CHF. This means not only more range bound but again the EUR V USD conundrum is seen. To move current price, EUR and USD must resolve its relationship. A breakout is coming.

USD/CHF ranges are found at bottoms 0.9657, 0.9788 and top at 0.9919. Current USD/CHF price is comfortable within current ranges yet trades in middle bounds. Best strategy for USD/CHF is trade ranges until a breakout occurs in EUR V USD.

Brian Twomey, Inside the Currency Market, btwomey.com

EUR/USD V USD/JPY V EUR/JPY

As a gauge to determine not only the health of currency markets but risk or non risk contexts. The perfect relationship is found in EUR/JPY, USD/JPY and EUR/USD because all are most widely traded dated to Euro introduction for EUR/USD and EUR/JPY and 2008 for USD/JPY.

EUR/USD is negatively correlated to EUR/JPY and USD/JPY by minus 89% and negative 95% which means USD/JPY correlates to EUR/JPY at 98%. Correlations reveal currency markets are correctly functioning yet in risk off mode. The problem with risk off mode is not found in EUR/JPY or USD/JPy but in EUR/USD because EUR/USD is out of range V both EUR/JPY and USD/JPY. Risk off mode is not exactly functioning perfectly. Perfect risk off mode would see EUR/USD and EUR/JPY falling while USD/JPY shoots higher.

EUR/USD V USD/JPY is most oversold and far out of range from 1.1557. EUR/USD V EUR/JPY is out of range from 1.1350. EUR/JPY is comfortably within range V both EUR/USD and USD/JPY from 122.09 – 124.94. USD/JPY is comfortably within ranges V EUR/JPY and EUR/USD yet at the bottom end from 108.47 – 111.04. EUR/JPY is not the problem pair in the mix rather its the struggle between EUR/USD and USD/JPY. EUR/USD should be higher yet USD/JPY is at bottom ranges but both negatively correlate. In the EUR V USD struggle, one side must win.

USD/JPY. Bottoms are found at 108.47 and 109.34 then next comes 109.76, 110.01, 110.67 and top of the range at 111.04. To look further out, 106.29 is the next big break below while 112.70 and 114.76 are the next big point breaks above. USD/JPY is as much oversold as EUR/USD but not to a great degree. Fundamentally, the BOJ wants USD/JPY higher.

EUR/USD is out of range from 1.1350 V EUR/JPY and current price should be located between 1.1350, 1.1415 and top of the range at 1.1480. The big point breaks below are found at 1.1194 and 1.1075. EUR/USD is oversold but again like USD/JPY not oversold to any great degrees.

EUR/JPY. Bottoms are found at 122.09 and 123.64. A cluster area exists at 123.52, 123.64 and 123.76. Then top of the range points exist at 124.25 and 124.94. To look further out, big point breaks are found at 122.34 below and above at 124.27, 126.10 and 126.61. EUR/JPY direction will be found within the resolution of USD/JPY and EUR/USD. If no resolution occurs and we see more range trading between EUR/USD and USD/JPY then EUR/JPY will join the range trade mix. The strategy is sell the tops and buy the bottoms and don’t look for a long term trade until prices normalize.

Brian Twomey, Inside the Currency Market, btwomey.com

EUR/USD: Levels, Ranges, Targets

Bottom and top vital points today. Newest features. Never allow information here to become information overload. Its very simple, the market today and everyday is completely covered by every traded pip. Systems back running this afternoon, more trades and pairs will post.

Top big break points 1.1653, 1.1552, 1.1464, 1.1395, 1.1388, 1.1375. Bottom vital points 1.1347, 1.1294, 1.1281, 1.1225, 1.1209, 1.1196, 1.1142.

EUR/USD Bottom 1.1308. Ranges above 1.1577, 1.1451, 1.1434. Ranges below 1.1294, 1.1277, 1.1154. Target 1.1476, caution again here, Failure point 1.1409. Targets above 1.1409, look for failure at 1.1425, at worse 1.1442. Target met at 1.1476, sell target 1.1420, Target met at 1.1442, sell target 1.1403, target met at 1.1425, sell target 1.1395, Target met at 1.1409, sell target 1.1387. Points on the way up, 1.1386, 1.1397, 1.1409, 1.1425, 1.1442, 1.1459, 1.1476.

Shorts below 1.1363, Target 1.1335, 1.1321, 1.1308 Bottom. Points on the way down, 1.1362, 1.1358, 1.1352, 1.1347, 1.1341, 1.1330, 1.1324, 1.1316, 1.1308 Bottom. Point 1.1335 must cross to head long again. Target 1.1344.

Brian Twomey, Inside the Currency Market, btwomey.com

EUR/USD: Levels, Ranges, Targets

EUR/USD Bottom 1.1312. Big points 1.1657, 1.1556, 1.1469, 1.1401, 1.1380. New readers, what’s 1.1657? That’s 3 month forward line, always dynamic as well as all points, levels, targets. The model captures every pip movement dynamically. A support or resistance point this morning for example may or may not be nullified later.

EUR/USD Bottom 1.1312. Big points 1.1657, 1.1556, 1.1469, 1.1401, 1.1380. Range points 1.1582, 1.1474, 1.1439. Ranges below 1.1299, 1.1265, 1.1159. Target 1.1482, caution here, Failure point 1.1414. Target met at 1.1482, sell target 1.1426, target met at 1.1414, sell target 1.1392. Doubtful target 1.1482, watch points here for failure and reverse above 1.1414. Look towards 1.1431 as sell point then reverse to target 1.1400. Points above 1.1380, 1.1391, 1.1414, 1.1422, 1.1431, 1.1448, 1.1465, 1.1482. Watch 1.1439 range break, tough area 1.1431 – 1.1439.

EUR/USD. Shorts below 1.1368, Target 1.1340, 1.1322, 1.1312 Bottom. Points on the way down 1.1363, 1.1351, 1.1346, 1.1329, 1.1312 Bottom. Point 1.1340 must cross higher to head long again.

Brian Twomey, Inside the Currency Market, btwomey.com

EUR/USD: Levels, Ranges, Targets

Levels, Ranges Targets are extremely close but not perfectly exact this morning. ECB releases lending surveys today. Should see new M1 and M3 figures as well. M1 and M3 higher then EUR drops. Its perfect correlations.

EUR/USD. Bottom. 1.1277. Added model feature is big break points for each day. Those points: 1.1603, 1.1507, 1.1424, 1.1361, 1.1344, 1.1336. Note 1.1424 coincides to monthly EUR/USD V DXY at 1.1422. EUR/USD top grows, caution longs. I would not long EUR at current prices. Target 1.1431, Failure point 1.1369. Watch sell point at 1.1400, added due to the large gap between 1.1369 – 1.1431. Target met at 1.1431 sell to 1.1383, Target met at 1.1400, sell to 1.1367, Target met at 1.1369, sell to 1.1352. Points on the way up, 1.1338, 1.1353, 1.1362, 1.1369, 1.1384, 1.1400, 1.1415, 1.1431.

Shorts below 1.1333, Target 1.1305, 1.1291, 1.1277 bottom. points on the way down, 1.1330, 1.1323, 1.1319, 1.1315, 1.1307 Then on to Targets.

Brian Twomey, Inside the Currency Market, btwomey.com

EUR/USD: Levels, Ranges, Targets

EUR/USD Bottom. 1.1227. Big break points, 1.1551, 1.1417, 1.1454, 1.1368, 1.1328, 1.1311, 1.1296, 1.1293. Ranges above 1.1300, 1.1474, 1.1636. Ranges below 1.1265, 1.1095, 1.1636. Target 1.1325, Failure point 1.1318. Target met at 1.1325, sell to 1.1305, target at 1.1318, sell to 1.1301. Points above 1.1288, 1.1303, 1.1310, 1.1318, 1.1325.

Shorts below 1.1282, target 1.1254, 1.1240, 1.1227 Bottom. Points on the way down, 1.1276, 1.1272, 1.1268, 1.1265, 1.1257, 1.1242, 1.1227 Bottom. Point 1.1254 must clear to go long again.

Brian Twomey, Inside the Currency Market, btwomey.com

EUR/USD: M1 and M3

As Draghi and ECB arrives again Thursday, M 1 Money supply annual growth rates dropped 10.3% February, minus 10.5 January. Loans to households increased from 1.6% February from 1.4% January. House purchases assumed is the biggest factor as interest rates are negative and low. Overall M 3 was unchanged at 5.0%, Credit to Government is the largest contributor to M3. Short Term deposits, not Overnight was Minus 2.5% February and minus 2.7% January. Overnight Deposit Growth Rates are holding steady at 11.6% December 2015, 11.3% January and 11.2% February 2016.

Since January 2015 and 14 months, M 3 increased 530 million Euros from 10,438 to current 10,969 while M 1 increased 674 million from 6042 to current 6716. Since September 2014 and start of negative rates, M3 rose 860 million from 10,108 to 10,969. M1 rose from 5694 million to 6716 and trades above M3. The M1 14 month average is located at 6386.78 and 18 month average at 6254.33. Both M1 averages are holding overbought to mid range. In M3, the 14 month average is found at 10674.00 and 18 month averages at 10566.55

Correlations in M1 Vs EUR/USD at the 14 month average equates to negative 44% and negative 85% at the 18 month average. In M3, Correlations V EUR/USD at the 18 month average factor to negative 85% and minus 44% at the 14 month interval. If EUR/USD is factored V both M1 and M3 based on current monthly averages, correlations calculate to minus 65% and + 27%. The noted point is the ECB releases money supplies against a two month lag, February was the last M 1 and M3 release so prior EUR/USD correlations factored from February 2016 – September 2014 when the ECB went negative to Eonia. Despite the lag and factored to current EUR/USD, correlations fail to change on a wholesale basis particularly M3.

M1 at 6716 Vs EUR/USD is out of bounds from the 14 and 18 month averages. To retain ranges, M1 must trade to 6524.08 and 6495.20. Ranges then become 6524 and 6495 – 6324.67 and 6322.21. Targets for M1 are located at 6592.58 and 6563.79. Ranges in M3 from current 10968 are again out of bounds as is the M1 counterpart in the 14 and 18 month points and should trade at 10785.00 and 10762.87. Normalized ranges then become 10700’s – 10623.12 and 10622.02.

Since the ECB cut Eonia to Negative September 2014, M1 and M3 rose steadily but the rise actually began in 2011 with a dip in 2013 to allow EUR/USD to see 1.3900 highs. A further ECB stimulus program would again see M1 and M3 continue its rise and a EUR/USD dive. Further rises in M1 and M3 would see more overbought for both.

The vital points in monthly averages for EUR/USD are located at 1.1242 and 1`1079. The range is located at 231 and 375 pips, and imples EUR/USD at roughly 1.0867 – 1.1617. The factor to consider in 1.1617 is Eonia despite 4 cuts since September 2014 only reflects the first cut dated to the 1 year average. The 1 year average should break this week to reflect the 2nd Eonia cut. This means 1.1617 EUR/USD is a stretch.

Brian Twomey, Inside the Currency Market, btwomey.com

EUR/USD: Levels, Ranges, Targets

Failed to mention in previous trades, the top remains in EUR/USD. This top is the same old ongoing story. Its a matter of time before the big drop occurs. But when EUR/USD rises in tops, its a warning EUR is not the driver rather USD and the Fed are drivers. Any price consolidation is an opportunity for severely wacked out topside ranges to compress. Many bullish calls I assume was the result to view the out of sync top ranges. Still 2 weeks remain in the monthly model. At end of month, I’ll post again the model.

EUR/USD. Bottom. 1.1212. Big points above 1.1526, 1.1465, 1.1432, 1.1292, 1.1277. Ranges above 1.1353, 1.1529, 1.1655. Ranges below 1.1183, 1.1013, 1.0894. Target 1.1352, Failure point 1.1297. Target met at 1.1352, sell target 1.1310. Target met 1.1297, target 1.1283. Points on the way up, 1.1271, 1.1274, 1.1286, 1.1297, 1.1324, 1.1352.

Shorts below 1.1267, Target 1.1239, 1.1325, 1.1212 Bottom. Points on the way down 1.1254, 1.1249, 1.1243, 1.1227, 1.1220, 1.1212 bottom. Point 1.1239 must cross to get long again, target longs 1.1253.

Brian Twomey, Inside the Currency Market, btwomey.com

EUR/USD: Levels, Ranges, Targets

Mentioned yesterday 1.1422 range point violated 3 times since April 1st post. !.1487 held. The downside model points in the same post is currently 1.1300, 1.1214 and 1.1193. EUR/USD is currently out of range V the 2 year, 3Y, 5Y and 7Y. Today is CPI and something else of no relevance because our profit focus based on a perfect Statistical price system is meaningless to news releases. News releases are secondary to price paths since the dominant feature is price and profit, not news. News releases assists or hinders a price path temporarily but never knocks a full intended price path off course. Price must always follow its intended path. Its statistically baked in and can’t be touched, hindered or stopped. Ranges are also ordained and fixed. I accidentally watched a guy on Fxstreet yesterday hold a seminar on ranges yesterday. The guy was light years off track but what did I expect. I can’t hold a greater role out here because I’m not known and the competition is disgusting with everybody and their grandmother with a website. I can’t compete nor am I trying.

EUR/USD. Bottom. 1.1203. Big point breaks above 1.1525, 1.1430, 1.1349,1.1286. Ranges above 1.1593, 1.1450,1.1276, Below ranges 1.1241, 1.1071, 1.0934. Target 1.1355, Failure point 1.1293. Target met at 1.1355, sell to 1.1307. Target at 1.1293, sell to 1.1276. Points on the way up, 1.1260, 1.1263, 1.1278, 1.1293, 1.1324, 1.1355.

Sell 1.1257, Target 1.1230, 1.1216, 1.1203. Price must cross 1.1230 to get long again.

Brian Twomey, Inside the Currency Market, btwomey.com

EUR/USD: Levels, Ranges, Targets

Monday, maybe sooner I’m fully operational again as trading systems were upgraded to its most powerful potential. More trades, pairs, combinations will post. For now, still hand calculations. I encourage all to view EUR/USD V DXY monthlies posted April 1. Those levels are valid as the guide. Note 1.1422 violated only 3 times since April 1. And it’s most violation was 42 pips. 1.1487 held, on the way down 1.1422, 1.1407, 1.1390 and 1.1360 broke. Those levels are monthlies, not absolute perfect but extraordinarily close and valid as trade signals.

EUR/USD. Bottom 1.1303. Caution, Big points today 1.1611, 1.1485, 1.1384, 1.1372, 1.1365. Range above 1.1515, 1.1693. Below 1.1207, 1.1037, 1.0883. Target 1.1440, Failure point 1.1387. Target met at 1.1440, sell to 1.1400. Target met at 1.1387, sell to 1.1373. Big break 1.1440, opens flood gates to 1.1515 and 1.1591. Watch area between 1.1387 – 1.1413 as further Failure points. Levels on the way up, 1.1365, 1.1374, 1.1380, 1.1387, 1.1413, 1.1426, 1.1440.

Shorts below 1.1358, Target 1.1331, 1.1317, 1.1303. Big long point 1.1331, targets 1.1347. Points on the way down, 1.1358, 1.1345, 1.1341, 1.1338, 1.1334.

Brian Twomey, Inside the Currency Market, btwomey.com

Sonia and UK Yield Curve

From Sonia 7.000 highs in 1997, February 2009 experienced a first ever break of 1.000 to current price at 0.4665. The turning point in the UK was February 2009 as Sonia traded further first ever lows June 2009 at 0.3100, 0.3800 June 2014 and 0.3900 June 2015. March 2016 traded 0.4100. Current price is not only overbought and heading lower but pure signal is involved in Sonia’s price as it travels closer to the positive zero point. What a low price means is current UK 10 year minus 2 year yield spreads trade 0.984 while 10 minus 3 month spread factors to 0.91 and is the highest among the majors in 10 minus 3 month spreads except the United States at 1.48. Germany 10’s minus 3 month trades 0.69, Japan trades 0.50, Canada trades 0.75, Australia trades 0.15 and New Zealand 0.48. Switzerland trades 0.36.

Sonia’s current range from the 1 – 10 year monthly averages is found from the 1 year average at 0.4602 – 0.4844, a 242 basis point range and a quite comfortable position as the unknown outcome of Brexit nears. Below the 1 year average at 0.4602 next targets the 7 year average at 0.4600 then the 5 year at 0.4570, 0.4546, 0.4502 and the 2 year at 0.4462. Below the 2 year at 0.4462 next targets 0.4322 then 0.4227 and 0.4210, the average in the 2 year – 3 month yields. Above range point at 0.4844 is not likely to break anytime soon as not only Brexit weighs on that rate but last quarterly UK economic news lacked upside momentum. The point at 0.4844 then serves as the upside sell point.

In terms of ranges based on monthly averages from 1- 10 years, the range is located from the 3 year at 0.4401 – 10 year at 1.6695.
Targets are located first at 0.4641, 0.4622 and 0.4562. Targets then embark on a questionable climb to 0.4930 and 0.4964. The overall target far below within the current structure is found at minus 0.3780 which factors to 0.622 on the negative scale. The break below the 10 year at 1.66 is a slow moving line but is currently descending on the entire system of prices. The questionable assumption in 0.4900 targets is due to most extreme sell prices at 0.4719, 0.4884 and 0.4942. Long points below at extremes begin at 0.4485, 0.3982, 0.3918 and 0.3490. From current 0.4665, price is not only overbought but light years of downside remain despite a deeply and an historic low price. In terms of Peaks and valleys and other statistical measures, the current Sonia price is literally flat on the floor.

Brian Twomey, Inside the Currency Market, btwomey.com

UK 2 and 10 year Yields: Levels, Ranges, Targets

The only commonality in the 2 and `10 year Gilt yields from the 0.384 and 1.368 closes is correlations remain positive throughout monthly averages 1, 2, 3, 5, 7 and 10 years however correlations severely drop in the 3 and 5 year and regain normal associations in the 7, 10 and 1 and 2 year averages. The current 10 and 2 year spreads based on closes extends to 0.984 and is low based on overall spreads between 1- 10 years. The current US Treasury 10 and 2 year spread runs 1.0178 to offer comparison. The 10 year Gilt yield is the driver in not only the 2 year yield but also dictates spreads because the 10 year is severely out of range in averages from 3- 10 years. Both the 2 and 10 year yield has ability to rise yet not affect the nearest 1.2088 spread.

Correlations in the 1 and 2 year averages between the 2 and 10 year yields reveal 87% and 91% but drop to 39% and 64% in the 3 and 5 year averages. The 7 and 10 year averages remain high yet correlate to 87% and matches the 1 year correlation. Correlations are high yet overall the message in the short end of the yield curve is maturities are healthy at least as it pertains to the post 2008 period.

Spreads 10 – 2 years between the averages factored from 1 – 10 year at 1.2088, 1.3399, 1.4174, 1.6070, 1.6501 and 1.9047. The spread at 1.9047 is actually the 7 year average while 1.4174 is the 10 year. The most important spread is 1.2088 yet spreads are wide. To offer a spot comparison to US Treasuries.

From January then December 2003, US Treasury spreads traded 2.27 and 2.43 in December 2003. In 2004, spreads traded 2.44 and 1.16 while 2005 spreads ran from 1.13 – minus 0.02. In 2006, spreads traveled from 0.03 – minus 0.11 while 2007 ran from minus 0.12 – 0.99. In 2008, spreads widened from 1.03 January to 1.45 December. Gilt spreads reveal any rises in either the 2 year, 10 or both are corrections in an overall downtrend.

For the 2 year from current 0.384, upper most range points are found at 0.5921, 0.4455, 0.4393, 0.4367 and 0.3979. Overall averages from 1 -10 years are located from 0.4863, 0.5272, 0.5464, 0.575 – 1.7307. Bottom range points are found at 0.3203, 0.3073, 0.3061, 0.1449 and 0.0653. Vital buy sell break points are located at 0.3798, 0.3714, 0.2952 and 0.2316. To head lower, breaks must be seen at 0.3798 and 0.3714. Current prices remain in well defined ranges from averages 1 – 10 years.
For the 10 year from current 1.368, upper most range points are located at 1.5953, 1.6434, 2.4057, 2.3542, 2.4126 and 2.9705. Bottom range points are found at 1.3381, 1.3214, 1.4889, 1.5818, 1.5910 and 1.8317. Overall averages are located from 1.736 – 1.9149. Most vital buy / sell points are found at 1.3381, 1.4824, 1.9473 and 1.9680. Current price at 1.368 is far outside ranges from averages 3 – 10 years and well within ranges from 1 and 2 years. Big supports are found at 1.3381 and 1.3214. The next vital average break above is located at 1.736 yet current price trades below every average from 1 – 10 years. While 1.736 – 1.9149 serves shortest term average break points, longest term average ranges are found between 1.736 – 3.1481.

Targets for the 2 year begin at 0.4121, 0.4141, 0.3937, 0.2925 and 0.3195. Targets for the 10 year start from 1.4872, 1.5180, 1.6618, 1.6382, 1.7525 and 1.97. The June Brexit vote must factor to targets especially the 10 year as well as 0.5% GDP, 1.1% downslides in manufacturing output, 23.8 billion trade deficit V EU and 13.7 billion V the remainder of world trade partners. Iron and Steel are main factors last quarter as trade with China slowed. Inflation not only remains low and below target but overall economic news from the UK lacks positive momentum.
Further, no reason exists to take the 10 year yield to upper decks and explains why ranges are out of kilter particularly as the BOE may threaten rate hikes, the downtrending news and Brexit situation lacks ability for the BOE to raise anytime soon. Upper deck targets to achieve would require rate hikes. Recall when the 10 year was 2.56 and GBP/USD was 1.7000’s in July 2014, news outperformed and the BOE threatened then to raise. Since World War 1 when GBP was Fixed to $20 Gold at GBP/USD 4.86, GBP/USD was firmly connected to the FED which means any rises or falls in Fed Funds met immediate response from the BOE but not this time therefore any rises in the 2 and 10 year yields and GBP/USD must factor as corrections within a much larger downtrend.

For interested, new focus on GBP pairs and UK news and markets.

Brian Twomey, Inside the Currency Market, btwomey.com

EUR/USD: Levels, Ranges, Targets

EUR/USD. Bottom. 1.1315. Vital levels for today, 1.1632, 1.1538, 1.1501, 1.1458, 1.1453, 1.1414, 1.1395. Range points above 1.1669, 1.1599, 1.1440. Below 1.1302, 1.1191, 1.1080, 1.0961. Target 1.1459, down 45 pips from last 1.1504 target. Failure point 1.1398, watch also turning sell point at vital 1.1428 then range point 1.1440. Tough area here, good sell points. Target me at 1.1459, sell to 1.1415, target at 1.1428, sell to 1.1400, Target at 1.1398 Failure point, sell to 1.1385. Points on the way up, 1.1379, 1.1384, 1.1391, 1.1398, 1.1428, 1.1443, 1.1459.

EUR/USD. Shorts below 1.1370, Target 1.1342, 1.1327, then bottom 1.1315. points on the way down 1.1356, 1.1353, 1.1349, 1.1347, 1.1331, Then bottom 1.1315. Point 1.1342 must cross to go higher. Pip range total 93 long term, 15 pips short term. I would continue the short strategy to target much lower prices.

Brian Twomey, Inside the Currency Market, btwomey.com

AUD/USD: Levels, Ranges, Targets

As mentioned AUD/USD remains literally on the floor again today and no changes overnight in the AUD structure. Certain parts of the AUD curve are severely overdone yet this aspect is not the RBA focus for now. AUD’s cousin, NZD is most seen as the overdone focus as its currently in Richter scale peaks. An overdone NZD V AUD price on the floor leaves AUD/NZD stuck and stasis. The driver of AUD/USD is EUR/AUD rather than NZD and associated pairs. NZD/USD is following the flow but its landing eventually will fall extremely hard and fast. EUR/AUD traditionally sees wide wide ranges, a holdover from 2008 crisis days so AUD/USD wide ranges must be explained by wide ranges in EUR/AUD. The DXY aspect at 94.50 currently is at opening Sunday prices of 94.58. EUR/USD in this mix from vital 1.1422 at the 5 year line informs EUR/USD achieved its range and only the 7 year average at 1.1628 remains out of range. What this means is EUR/USD is at crucial points but despite 1.1422 violation, the range failed to hold.

AUD/USD Bottom, 0.7588. AUD/USD Bottom cleared below as current price is 0.7552. Big points for AUD/USD, 0.7638, 0.7641, 0.7650, 0.7656, 0.7661. Range points above 0.7779, 0.7652. 0.7627, 0.7601. Below 0.7550 and 0.7448. Target 0.7668, 0.7655, Failure point 0.7645. Upper most tops and targets are found at 0.7680 and 0.7690. Below the 0.7550 range point targets 0.7448 then 0.7428. With solid 20 and 18 pip range points, we could very well see AUD/USD ranging around today.

Brian Twomey, Inside the Currency Market, btwomey.com

EUR/USD: Levels, Ranges, Targets

EUR/USD. Bottom. 1.1367. Big points 1.1683, 1.1588, 1.1554, 1.1509, 1.1467, 1.1434. Range above 1.1544, 1.1776. Below 1.1196, 1.1082, 1.0996. Target 1.1504, Failure point 1.1450. Overbought above 1.1504 if seen, begin sell 1.1504. Points 1.1429, 1.1432,1.1441, 1.1450, 1.1477, 1.1490, 1.1504.

Shorts below 1.1422, Target 1.1394, 1.1367 Bottom. Levels 1.1394 must cross to head long again.

Brian Twomey, Inside the Currency Market, btwomey.com

AUD/USD: Levels, Ranges, Targets

The commonality among currency pairs especially since Draghi cut Eonia is curves are fat fat in the middle and its driving all currency prices. Either ends are alright but its the fat middle driving the show and must normalize. See a commodity price, stock market price or other market price involved in this assessment, hope not cause it doesn’t exist, its found in currency prices only.

AUD/USD. Bottom. 0.7504. Big point breaks above, 0.7551, 0.7557, 0.7568, 0.7570, 0.7577. Pip range today 20 long term, 15 short term. The RBA is trying hard to hold AUD/USD down. The top is miles away and AUD sits on the floor. Caution shorts. Tops are found at 0.7609, 0.7597, 0.7579. All points are not targets today yet, but watch these points if fireworks occur on Fed Minutes. They will result in terrific sell points.

Range points above 0.7566, 0.7695. Below 0.7516, 0.7466, 0.7315. Targets today 0.7582, Failure point 0.7569. Watch 0.7566 range point for additional sell point. Target met at 0.7582, sell to 0.7562. Target at 0.7555. Failure at 0.7566, sell to target 0.7554. Points on the way up, 0.7550, 0.7560, 0.7569, 0.7575, 0.7582.

Shorts below 0.7541, target 0.7522, then 0.7512, then bottom 0.7504. Points on the way down, 0.7539, 0.7536, 0.7532, 0.7527, 0.7515, then bottom 0.7504.

Brian Twomey, Inside the Currency Market, btwomey.com

EUR/USD: Levels, Ranges, Targets

The 1 year EUR/USD V DXY line is minus 80.45 V 186.32. If ever 80.45 turns positive, EUR/USD heads to upper decks. But the 1 year line is out of kilter with its partner averages from 2 – 10 years as they range minus 60’s and 168’s. The 1 year line rose 56 points in 4 months while 2- 10 year lines rose about 34 points. For now and the month, no big deal here as the trend remains down, top is here and growing worse. The long term long trade is not here and not recommended against present numbers unless we see a significant drop then a re evaluation. Last EUR/USD V DXY article was also submitted to investing.com. They don’t like detail in their articles, only general descriptive writings.

Bottom. 1.1299. Big Points above 1.1366, 1.1368, 1.1379, 1.1440, 1.1484, 1.1611. Range points above 1.1724, 1.1494. Below 1.1220, 1.1129, 1.1000. Target 1.1434, Failure point 1.1381. Target met at 1.1434, sell to target 1.1395, Target met at 1.1381, sell to target 1.1369. Above 1.1434 opens flood gates to 1.1472, 1.1511, 1.1588. Not likely above 1.1472 cause ranges compress severely at this juncture. Yet the top is also growing much worse so sell rally mode. Points on the way up, 1.1369, 1.1381, 1.1401, 1.1421, 1.1427, 1.1434.

Sell below 1.1354, target 1.1326 then bottom 1.1299 and bottom range point 1.1220. points on the way down, 1.1350, 1.1340, 1.1334, 1.1316, 1.1299 bottom. Longs from 1.1299 must cross 1.1316 to head higher.

Brian Twomey, Inside the Currency Market, btwomey.com

NZD/USD: Levels, Ranges, Targets

Commodity currencies is another misguided term without foundations. Australia and Iron Ore is vital to exports for the past 200 years yet have we seen Iron Ore drops and AUD/USD rise. Popular is association of WTI crude to USD/CAD. Canada Oil is WCS and a different crude to WTI. Ever seen CAD and Crude prices de couple. Of course. Why. Look outside the currency price or currency markets then trade answers won’t be found. WTI has Correlation associations to USD/CAD but correlations revolve in levels which changes the price associations between two financial instruments. Correlations may change daily, weekly, monthly. Last check, CAD and WTI actually shared a loose correlational association which means, its a failed association and unreliable to trade. EUR/USD and DXY share 98% Correlations. How long will this association last. Not very long. Then Correlations all around will see abrupt changes upon breakouts. Not popular but again the currency price is the least understood price in all of markets.

NZD is severely overdone and is set to go on a long journey southbound. Sell rallies will last long into the future. Big points are located at 0.6813, 0.6804, 0.6801, 0.6795. Tops are found at 0.6893, 0.6863.

NXD/USD. Bottom. 0.6761. Range point above 0.6837, 0.6880, 0.6899. Below 0.6753, 0.6692, 0.6632. Target 0.6823, Watch 0.6853 on break of 0.6823. Target at 0.6823, sell target 0.6809. Target at range point 0.6837, sell to 0.6819.

NZD/USD shorts on break 0.6795, target 0.6778, 0.6761 bottom. Then 0.6753 range point.

EUR Next.

Brian Twomey, Inside the Currency Market, btwomey.com

AUD/USD: Levels, Ranges, Targets

Big Glenn Stevens surprisingly reported Broad Money in the RBA statement. A time once existed when Bank research reports contained premiere focus on interest rates and money supplies. Societe General was one of the best until they fell into the trap as all others into the daily Bloomberg market reporter so to be seen with inane information. The smartest person in the room these days is not the smartest person in the room. Today, Danske bank is the smartest, hardest working bank out there. I always had big respect for these guys.
M1 remains a premiere indicator as to not only levels but velocities and today especially velocities in a negative interest rate world. An example. Danske bank focus on EUR/USD longs was derived from low M1 and low velocity readings. Its a smart trade. Each nation shares a unique relationship to its M1 counterpart. For EUR/USD, low M1 is a rising EUR. But bottoms and tops are found in M1 readings as it must be factored and possibly set on a chart to see the picture for those that require a picture. ECB M1 for February dropped 10.3% February, and Minus 10.5% January. Its holding EUR from its drop. Eventually, M1 will rise so EUR/USD will begin the drop. Low M1 sees low velocities generally. Velocities warns how fast or slow will be the rise and fall. But both viewed either by itself or together supports a higher EUR/USD and despite a drop in interest rates. Somewhere the interest rate supports the Money supply and velocities. Its a smart trade taken together for interested.

The RBA M1 currently stands at 319.5. In June 2015, M1 stood at 308.7 and first ever 300’s. In 2008 crisis, M1 stood at 233.0. As M1 rose, AUD dropped. Now credit borrowings was supported as June 2016 was 0.5, today 6.6. Supported by heavy borrowing for higher required down payments for Housing. Housing holds Australia’s economy. But AUD Bank Bills are not Eonia and Euribor as Europe prices V Australia yields share a vastly different relationship, for the most part, its negative.

AUD Big points are found at 0.7632, 0.7625, 0.7620, 0.7618, 0.7611, 0.7607, 0.7598. AUD is close to bottoms. Ever notice every time Big Glenn Stevens says AUD/USD to high, it rebounds. That’s the risk as AUD/USD is far from a top. Don’t push your luck on further shorts. The damage has been done, for the most part. Now overall, sell rallies and be patient cause AUD is not EUR/USD.

Target is found at 0.7624, Failure point 0.7613. Pip ranges are long term 20 pips V 16 short term. Upper most Targets, 0.7638, 0.7654 and 0.7665. This pip range point says range range for the day. Range points above 0.7645, 0.7749, 0.7856. Below 0.7544, 0.7443, 0.7373, 0.7340. AUD is at and close to bottom ranges. Longs must clear 0.7557 then 0.7594. The trade is range focus.

Brian Twomey, Inside the Currency Market, btwomey.com

EUR/USD: Levels, Ranges, Targets

EUR/USD. Bottom 1.1330. Ranges above 1.1422, 1.1501 1.1614 Below 1.1352, 1.1274, 1.1028. Target 1.1478, Failure point 1.1424, watch range point 1.1422 for additional Failure point. Big breaks on the way up, 1.1392, 1.1398. Target at 1.1478, sell to 1.1432, Target at 1.1424, sell to 1.1405. Caution longs as tops remain. Points on the way up, 1.1392, 1.1398, 1.1405,1.1414, 1.1424, 1.1437, 1.1451, 1.1478. Tough area between 1.1444 – 1.1478. Any price above 1.1478, sell.

Shorts below 1.1385, Target 1.1357, 1.1343 then bottom 1.1330. Longs must clear 1.1345 upon 1.1330 target. Points on the way down, 1.1383, 1.1377, 1.1372, 1.1367, 1.1364, 1.1361, 1.1358, 1.1344, 1.1330 Bottom.

Pip range today, 94 long term, 18 short term. Descending lines 1.1521, 1.1656. Level 1.1478 big line to open flood gates to 1.1517, 1.1557, 1.1637.

Brian Twomey, Inside the Currency Market, btwomey.com