Last evening AUD/USD Dead stopped 0.7218, 2 pips shy of reported second target at 0.7220, 8 pips above first target 0.7210 and broke 0.7203 range. At post time, AUD/USD was already not only at 0.7150 Bottom but 0.7140 was next range break. What happened with AUD at 0.7203 was range moved. Most important, Australia’s goods exported at a correct price.
CAD and BOC this morning, we’ll look at CAD further. Maybe USD/JPY as well. USD/JPY was completely covered May 1 as a monthly trade when long from 105 resulted in a + 600 pip trade for the month.
EUR/USD. While the focus in other EM and Asia pairs highlighted the disjunctions between EUR and USD, sometimes this binary view is not necessarily the full explanations nor cause of problems. EUR/USD within its own pricing curves has severe problems in its continuity. Short term, EUR/USD desperately wants to fly higher but lacks ability as other portions of the curve stop any price rises. As I look back over many days, this struggle has been a constant.
EUR/USD. What held yesterday morning and overnight was 1.1150 Bottom V the next range point at 1.1134.
Today’s vital points above, 1.1301, 1.1272, 1.1224, 1.1188, 1.1166, Then rough between 1.1150 to 1.1153.
Below Vitals 1.1058, 1.1045, 1.1019, then 1.0977, 1.0960,1.0935. Why vitals because ranges are wide from 1.1334, 1.1511, 1.1547 above to 1.0900’s below.
Bottom today 1.1090. Upper targets 1.1218, 1.1165, watch closely for reverse at 1.1191 as this point converges against 1.1188.
Where’s longs, at bottoms. The import of today’s bottoms is 1.1090 breaks, next comes 1.1058 and a long way down. Normal market conditions, they don’t allow prices to fly in wide variations so look at 1.1090 as vital today.
Brian Twomey, Inside the Currency Market, btwomey.com