EUR/USD: Levels, Ranges, Targets

When EUR/USD was last addressed, most vital break point above was 1.1153. Today’s most important break points are now located at 1.1140 and 1.1141. The EUR/USD dilemma both bottom and topside is multiple supports and resistance points are built into current prices for many weeks. While 1.1140 and 1.1141 are big break points, the upstroke is limited to the next set of resistance levels at 1.1145 and 1.1155. Upon a 1.1155 break then comes the dropping line at today’s 1.1269 and again would render EUR/USD inside a 100 pip range. Add today’s 3 month moving line at 1.1230 then 1.1269 has little chance of a break anytime soon. Overall and shortest terms, the EUR/USD price is dead on the floor but is again fighting its longer term overbought on the price curve.

Further in relation to 1.1140 and 1.1141, the top of the distribution channel is found at today’s 1.1089, yesterday 1.1092 and Monday at 1.1094. The curve is dropping but at 2 and 3 pips per day. A break of 1.1089 leaves EUR/USD in danger zone between its choices to break higher or a deep pullback. But how does 1.1140 achieve its destination from 1.1089. EUR/USD must break 1.1093, 1.1098 and 1.1110. Then the run to 1.1140 is wide open with next points at 1.1145 and 1.1155. To solidly become an uptrend and to see EUR/USD wth any chance to travel higher then 1.1180 must solidly break and hold. Then any gains overall will be limited to 1.1298 from current levels.

On the bottom , today’s base is built solidly at 1.0980 and 1.0983. Today’s bottom is 1.1023 and 1.1021 with next mass of double supports at 1.1002 and 1.1007. The bottom and extreme of the channel is located at 1.0932. Important points become 1.0977 and 1.0960. EUR/USD in the 1.0900’s is dangerously low and little chance for price to hold if seen. At a 2 and 3 pip drop in the curve and against 50 pip daily ranges, price needs a few more days at least to see 1.0900’s. The opportune points on the downside to get long again is found in the lower 1.1007 to 1.1023. But 1.1035 and 1.1037 is rough supports and a must break for EUR/USD to have chance to see lower prices. Overall, EUR/USD is completely range bound stuck and not a favorite pair at the moment.

Brian Twomey, Inside the Currency Market, btwomey.com, Trade Signals? brian@btwomey.com

Canada BOC Preview and Corra

Canada contains a uniqe system of interest rates to include its two main rates: Canada’s Overnight Repo Rate and the Overnight Money Market Finance Rate. Both trade below Canada’s headline at 0.75 and Corra always trades above OMMFR. The Target for the overnight rate typically trades between Corra and OMMFR but today trades below at 0.500 from Corra’s 0.5204 and 0.5037 for OMMFR. What this means for today is not a signal to the BOC to lower or raise headline. Its low because the data reported for CORRA and OMMFR is one day old and the market corrects such imbalances quickly.

Corra trades between its 1 and 2 year monthly averages at 0.5167 and 0.5665. Above 0.5665 comes next the 3 and 4 year monthly averages at 0.6319 and 0.6831. Corra averages from 1 to 10 year are perfectly aligned from 0.5167 and 0.8628 at the 10 year.
Corra is not only oversold in every average but its location imparts the next BOC move. From 0.5200, Corra is 23 basis points from headline at 0.75 and 14 to 15 basis points from its first extreme prices at 0.3800 and 0.3700. Corra’s current price is low and particularly from its longer term averages.

If Corra is oversold then OMMFR is oversold to a higher degree because OMMFR trades below Corra as a protection to Canada’s interest rate system. All Corra targets point higher due to oversold from 0.5187 to 0.6400’s.

Polooz and the BOC conceivably has room to lower yet to drop would leave the averages to far extremes. Further, to lower would be the last bullet shot for the BOC and I’m not sure the BOC is ready to fire especially if the FED continues its raise Fed Funds messages. From past quarterly and monthly BOC reports, its always been the desire for the BOC to drop CAD lower by allowing the FED to raise and provide the heavy lifting.

The further aspect to not lower is the BOC fails our rules to lower. In light of the evidence, the BOC reamins on hold.

GBP/USD; Realignment, Levels, Ranges, Targets

The preeminent explanation in currency markets and Realignment in particular is to view GBP/USD, USD/JPY and GBP/JPY. In USD/JPY and GBP/JPY, 1 year Correlations run +98% while GBP/USD V GBP/JPY +97% and +90% in USD/JPY V GBP/USD.

Currency market prices are severely imbalanced under a present Correlation scenario and the current situation not only lacks ability to hold but significant moves are ahead as Correlations must align properly. The main question is who will own the JPY cross pairs. In a continued risk off environment such as our present post 2008 framework then USD/JPY will own the cross pairs and EUR/USD and GBP/USD heads lower. If GBP/USD owns GBP/JPY then both head significantly higher and USD/JPY drops far lower to break 100.01 and 99.76. USD/JPY or GBP/USD must win control of GBP/JPY to determine the next or continued market phase.

Pre Brexit, GBP/USD and GBP/JPY correlated as high as +90% then +60 % just prior to GBP’s massive fall. GBP/USD, USD/JPY and GBP/JPY massive Brexit drop forced a new Correlational marriage among all 3 pairs yet a divorce is imminent and the Phoenix must emerge.

The first clue is USD/JPY is on the verge of a huge break at 103.74 while GBP/USD and all its cross pairs trade below 10 year averages. This situation cannot remain and its why Currency markets are headed for absolutely wonderful volatility especially all GBP pairs as not only Realignment must work its way through market prices but significant break points must be seen to complete Realignment.

Why an abstract, litle known and rarely seen scenario such as Realignment is important to traders is because as 1998 and 2008 revealed, trends will emerge and could easily last for years. EUR/USD and GBP/USD for example went on an upward multi year rampage after 1998 while post 2008 both dropped about 5000 pips. Its time for both to reverse. Under the worst scenario is volatility will remain. Respectfully, currency markets are in an incredible time presently. As we studied the 1998 and 2008 crash periods and Realignment, 10,000 exchange rates were entered to bring today’s vital information.

GBP/USD today is built upon solid bases at 1.2999, 1.2975 and 1.1944 with most vital 1.2999. Today’s bottom is ocated at 1.3014. To see bottoms, breaks must be seen at 1.3047, 1.3044 and 1.3030.

On the way down, 1.3160 must break then 1.3115, 1.3093, 1.3084, 1.3079, 1.3069 then on to 1.3047 and 1.3044.
Above big breaks still exist at 1.3224 and 1.3272. The longer range target as of today is 1.3543 with significant breaks above at 1.3698 and 1.3742. Lines are exact, daily yet dynamic and move constantly so forecast is today only.

Brian Twomey, Inside the Currency Market, btwomey.com

NZD/CAD: Levels, Ranges, Targets

To define risk markets and its relationship in currency pairs. EUR/USD and CAD/ZAR since 2008 and to current day trade far in extremes to each other. Remainder currency pairs trade in between EUR/USD and CAD/ZAR. In July 2008, CAD/ ZAR was 6.6113 and rose to 12.2399 for an 84% gain while EUR/USD lost 29% from 1.5990 to 1.0552.

Since July 2015, CAD/ZAR from 9.4955 rose to 12.2399 for a 28% gain while EUR/USD gained 9% from 1.0579 to 1.1569 highs. The overall risk relationship compressed and no longer at far 2008 extremes. Two interesting developments are involved in the EUR/USD and CAD / ZAR relationship.

EUR/USD needs a break of 1.1155 and trades below while CAD/ZAR at 11.1567 trades below its respective break point levels at 11.4833 and 11.6220. Secondly, risk off pair EUR/GBP at current 0.8532 is not only overbought but trades above CAD/ZAR for the first time ever. EUR/GBP trading above never occurred since the 1971 free float, not since 1961 and not since data ended in 1952.
EUR/GBP as a risk off currency pair is never the leader in market risk determination and must eventually trade much lower particularly when 2015 began for EUR/GBP at 0.6993 and rose to 0.8530 for a 1537 pip move and 22% gain.
To see risk on in markets again and EUR/USD trend, EUR/GBP must break 0.8029 and 0.8021, CAD/ZAR 9.4117 and next most overbought risk determinant pair NZD/CAD 0.8636.

NZD/CAD drivers are averages at 0.9134 and 0.9028. From current 0.9521, NZD/CAD is far far overbought and hits the upper Richter Scale at 0.9566. NZD/CAD targets the 0.9270’s area. Next below is 0.9505, 0.9469, 0.9416, 0.9371, 0.9341, 0.9318, 0.9284. The big break occurs at 0.9231 and a break to target 0.9134 occurs at 0.9182.

Overall, markets so far remain in risk off mode until big break points are seen as EUR/GBP, NZD/CAD and CAD/ZAR are in correction mode.

Brian Twomey, Inside the Currency Market, btwomey.com

USD/CAD: Weekly Levels, Ranges, Targets

In USD/CAD, many significant supports exist below and established inside current price due from USD/CAD’s rise from the 2008 crisis. Most vital supports are located at 1.2913, 1.2313, 1.2294, 1.1921 and 1.1767. Currently, USD/CAD trades comfortably above 5, 10, 14 and 16 year averages. The concern and USD/CAD price drivers for the week are located at 1.2913 and 1.3050 from Friday’s 1.3036 close.

USD/CAD’s further uptrend must break not only 1.3050 which is actual 1.3052 but 1.3172. A new upward trend begins however I would begin to look for shorts from middle 1.3200’s to 1.3300 as USD/CAD becomes far overbought.

The next break points to 1.3052 are located at 1.3045, then upon a break 1.3062, 1.3072, 1.3082, 1.3090 and watch closely 1.3110 and 1.3111 as next big vital levels to continue or reverse the uptrend. At 1.3110, vital break at 1.3052 becomes 1.3055 so 1.3110 may become a correction due because the firm uptrend doesn’t begin until a break is seen at 1.3172. Overall, USD/CAD break at 1.3052 places CAD in no man’s land between 1.3052 and 1.3172. I would consider longs at 1.3052 but caution .

To offer the significance to 1.3110, next above 1.3131, 1.3144, tough break at 1.3158 and 1.3159. Why tough break because then 1.3175, 1.3187, 1.3193 and 1.3206.

On the downside and failure to break 1.3045 and 1.3052 above then next big levels are located at 1.3028 and 1.3027. Both not only huge inflections but USD/CAD becomes lost in no man’s land between 1.2913 and 1.3028. The uptrend must begin again at breaks of 1.3027 and 1.3028 and on to 1.3045 and 1.3052. Next levels from 1.3027 becomes 1.2989 and 1.2970. The significance of 1.2970 is a run to crack 1.2913 by 1.2929 and 1.2924. If 1.2913 trades below then 1.2847 and 1.2821.

1.3028, 1.2929 and 1.2913 holds greatest significance to USD/CAD downside because the new downtrend establishes on a break of 1.2799. Overall, USD/CAD is wandering around its significant averages at 1.2913 and 1.3052 and will remain trading around its averages for weeks in the future as extreme sell prices for the week are found at 1.3134, 1.3150 and 1.3232.

Below long extreme prices are located at 1.2798, 1.2766. In the larger extreme scenario, USD/CAD is done at 1.2614, 1.2555 and 1.2511. Above at 1.3329, USD/CAD is overdone. Extreme prices means if those levels trade, price cannot hold nor remain in the territory and must fall back or rise above those levels.

Brian Twomey, Inside the Currency Market, btwomey.com

AUD/USD: Weekly Levels, Ranges, Targets

AUD/USD: Weekly

AUD/USD problem is price location is in no man’s land and caught between two break points below at 0.7474 and rising 0.7422. The two big averages places AUD/USD between 0.7588 and 0.7568 above to 0.7397 and 0.7361 below. To trend higher, AUD/USD must break 0.7568 and 0.7588 while trends lower means price must trade below 0.7397 and 0.7361. From current close at 0.7561 and a 38 pip daily range, AUD/USD is in meandering stages without direction.

In a larger context, to see AUD/USD on a serious uptrend then 0.7808 must trade higher.

What drives AUD is not the support at 0.7474 but the line at 0.7422. If 0.7422 continues to rise, AUD rises. The top of the distribution channel from 0.7422 is currently located at 0.7614, 0.7629 and 0.7646. Sell points in extremes are found from 0.7604, 0.7608, 0.7618, 0.7625. Sell to 0.7588 and 0.7568 supports and 0.7531 on breaks below. Currently, AUD/USD is overbought but not to any extreme worries yet but shorter term averages from 5 to 253 days are not only dropping but explains why AUD/USD leans to overbought.

To move higher, 0.7531 must hold then next comes 0.7567, 0.7568 and 0.7588. An uptrend then begins with next important levels located at 0.7590, 0.7595, 0.7604, 0.7614, 0.7621, 0.7631, 0.7641, 0.7649, 0.7669, 0.7689, 0.7702, 0.7716. The top of the channel overall is 200 pips higher and located at 0.7751. At 200 pips and 38 daily pips assumes AUD/USD hits 0.7716 in 5.26 days without corrections. AUD prices will remain in slow grind mode.

AUD/USD extreme prices and long points are located at 0.7416, 0.7331 and 0.7324. At current 0.7561, AUD/USD is dead center of top channel at 0.7751 and extremes below at 0.7331.

Inside the larger downtrend, AUD/USD must break 0.7531, 0.7417 and 0.7413. The point at 0.7413 is derived from 0.7422 as the formal break of 0.7422 is 0.7413. As AUD/USD drops so does 0.7422 and holds supports until 0.7413 breaks below. EUR/USD at big break 1.1148 is experiencing the same phenomenon as 1.1148 rises to 1.1153 upon price approach. The big break of 1.1153 occurrs at 1.1155. Only then does EUR/USD uptrend begin.

For the downtrend, breaks must occur at 0.7397, 0.7379 and 0.7361. A formal downtrend begins with next levels at 0.7384, 0.7366, 0.7372, 0.7360, 0.7354, 0.7348, 0.7345, 0.7344, 0.7327, 0.7317, 0.7307, 0.7303 and 0.7299. The bottom channels are located at 0.7199 and 0.7277. I would look long at 0.7300’s.

The level of 0.7474 sees break at 0.7472, 2 pips so above points changes by 2 pips higher. Assume 0.7472 and 0.7413 breaks lower.

Then levels below begin at 0.7368, 0.7363, 0.7359, 0.7356, 0.7346, 0.7343, 0.7327, 0.7316, 0.7305 and 0.7302. The bottom channels and long points are located at 0.7211 and 0.7081.

Overall, AUD/USD most important level to see a serious uptrend is located at 0.7808. AUD will struggle and overbought in lower to mid 0.7600’s. Levels at 0.7300 is severe oversold. Lower break must be seen at 0.7531, 0.7472, 0.7413 The new downtrend begins at 0.7397 and 0.7361.

Brian Twomey, Inside the Currency Market, btwomey.com

Brian Twomey NFP Trade Calls: July 8

Trade Calls issued from 5:00 am EST to 6:00 am EST. To understand the system and how to trade it, read below.

AUD/USD

Long short line 0.7491. Use 0.7491 as your guide to long or short. Long and short Price extremes 0.7427 and 0.7559, 0.7571 and 0.7583. All above points are richter scale overbought and perfect sells if seen on NFP.

Most important 0.7473, 0.7436, 0.7427 and 0.7412. Above 0.7545 and 0.7559.

Bottom. 0.7453 achieves by breaks at 0.7472 and 0.7462. A break of bottom at 0.7453 goes to 0.7427. Any break of bottom then long to target 0.7462. If 0.7472, 0.7473 and 0.7462 holds then long to target 0.7491 and 0.7511.

Upper targets 0.7547 and 0.7531. Most important 0.7545 and 0.7559. Look for reversal at 0.7545 and 0.7559. 0.7531. Above 0.7559 then 0.7583. Both prices can’t hold if seen and must fall back, sells only starting at 0.7559, 0.7545.

EUR/USD

Long short line 1.1078

Most important points 1.1106, 1.1127, 1.1151. Below most vital 1.1028.

Bottom. 1.1022 and 1.1028. Achieves by breaks at 1.1050 and 1.1036. If 1.1022 bottom breaks on NFP then long to 1.1036 and 1.1050. If 1.1050 and 1.1036 holds then long to 1.1078.

Upper targets 1.1134, 1.1131, 1.1127. Big huge break 1.1151. Upper targets too ambitious. On break 1.1151 then next 1.1166 and 1.1177.

GBP/USD

Long short line 1.2941

Most important 1.2860, 1.2903 and 1.2978 and 1.3022 and 1.3023.

Bottom. 1.2876, achieves by breaks at 1.2909 and 1.2892. If 1.2909 and 1.2892 holds then long to 1.2940 ish.

Upper targets 1.3005, 1.2998 and 1.2986. Then reverse short 1.2960’s. Big break 1.2978, must break to go higher watch reversal at 1.2978.

GBP/JPY

Long short line 129.97

Most important 129.59, 130.34 and 130.78

Bottom. 129.32, achieves by breaks at 129.64 and 129.48. Note supports 129.64, 129.48 and 129.59. If supports hold at 129.64, 129.59 and 129.48 then long to 129.90’s.

Upper targets 130.34, 130.43, Upper most on NFP then 130.63 and 130.79.

EUR/JPY

Long short line 111.27

Most important points 111.76 above and 110.77

Bottom. 110.71 and from vital point 110.77. Bottom achieves by breaks at 110.99 and 110.85.

Upper targets 111.76, 111.68, 111.61. further on NFP crazy then 111.82 and 111.91.

NZD/USD

Long short line 0.7255

Most important breaks 0.7232 and big line break 0.7101.

Bottom. 0.7218, achieves by breaks at 0.7236 and 0.7227. Bottom hold then long. Bottom breaks then long to 0.7236 and 0.7232. Bottom holds then long to 0.7236 and 0.7232.

USD/JPY

Long short line 100.44

Bottoms 100.01 and 99.76, both huge breaks.

Upper targets 101.28, 101.40 and 101.52

Bit more detail to NFP trading instructions but the main points are here, targets hit, the market and prices were fully covered. All knew exactly what to do, every pip was known. All make tons of money.

Trade signals? Brian Twomey, Contact: brian@btwomey.com

Brian Twomey, Inside the Currency Market, btwomey.com

Brian Twomey Currency Prices In Action

To many friends and years long followers. I wish to explain this current system so all know how to trade it. If others aren’t interested but are interested in signals then I can provide other trades from other math models that are just as good.

Think about a 5 day moving average. Theoretically, its takes 5 days to hit a 5 day target. Inside the long wait pips move and we watch without profit.

My system. Think about a 2 or 3 hour moving average. Well that’s a good description and its derived directly from central bank models with my own changes. Inside 2 or 3 hours are bottoms, Levels, Ranges and Targets.

First we have a long short line. Its an equilibrium line between upper targets and Bottoms. Surrounded by this line are levels. Price will immediately trade around these levels until a formal break occurs. Sometimes price breaks immediately. Usually around equilibrium lines, about 5 pips either side of the line will trade until the formal break happens. When the break happens, take it quickly in the direction of the break.

Let’s say price broke above. Two target points are provided because a price can easily fail before the uppermost target. Watch the 2 target points closely to determine if the first target breaks higher or fails. A break higher means the uppermost target will hit. Price may fail at the first fail target. At the targets uppermost or fail points, price becomes overbought so must drop. Take profit on the long upon target uppermost or fail then quickly reverse short. Look for 10 to 20 pips on the short. A pair like GBP/JPY most times hits targets then drops as all other currency pairs. Sometimes it goes beyond uppermost targets. What a sell gift. Any price beyond uppermost target is a sell gift.

If a price fails at the first fail target point then price will go short below the equilibrium line and hit the first bottom target. Honestly, another gift. If a price is supported at the first bottom target on shorts, price will travel higher past the equilibrium point to target the first fail point.

A bottom is rock solid 99.99%. Should a bottom price ever break on crazy market announcement, long and hurry to target the first bottom side failure point. Most important is price is oversold at the bottom point and even first fail point. On shorts, take profits and quickly reverse long because price is oversold.

Above or below equilibrium,targets must by mathematical laws hit. Sure we may miss 1 or 2 pips but never worry because we have 7 pairs, 3 times a day with the good possibility to hit 50 pips per pair, 3 times per day. Its a 2 or 3 hour moving average and with it, I figured how to capture every pip that trades within a few hours.

Here’s EUR/USD

EUR/USD

Trade valid until 9:45 p.m.EST

Long short line 1.1063

Bottom. 1.1021, achieves by 1.1042 and 1.1031, First target 1.1042 and 1.1046

Upper target 1.1103 and 1.1117. Longs must cross 1.1079. Look for failure here.

Upper points 1.1065, 1.1069, 1.1071, 1.1077, 1.1080, 1.1084, 1.1089, 1.1094

EUR/USD: Levels, Ranges, Targets, Realignment

A market price contains an intended price path and a path firmly rooted in mathematical laws. An intended price direction must by laws meet its obligated target. Restrict the pathways only temporarily stops price direction but its temporary until restrictions are lifted or until market participants force the breakout based on fundamentals and in which case, price moves by law to the overall intended target.

Due to ECB structural changes, inside EUR/USD’s price is pure noise in search of a signal. The big breakout is not here yet but pressure is building by the day. Because its still day 5 in ECB changes, credence is given to the Realignment condition for now. USD/JPY touches or breaks below crucial 100.03 and 99.76 then Realignment completes. View Realignment in currency markets as the “Phoenix Rising from the Ashes” with the caveat is it more of the same or new trend periods. USD/JPY 100.02 determines the answer. EUR/USD skyrocketed higher from 1999 introduction because the new period then began in 1998 and lasted until 2008. EUR/USD in July 2007 was 1.6000’s and dropped 5000 pips. EUR/USD was introduced at about 1.0000 and rose 5000 pips to 1.6000’s. The change and Realignment is ever so close.

EUR/USD Bottom today is found at 1.1030 and reaches bottoms by breaks at 1.1053, 1.1058 and 1.1044. EUR/USD confluence of tough supports is located at 1.1058 and 1.1053.

Targets today are located at 1.1149, 1.1141 and 1.1133. For today, those are just numbers as EUR/USD must break 1.1103, 1.1112, 1.1116, 1.1130 and crucial as mentioned yesterday 1.1156.

A break of 1.1156 targets next 1.1176 then 1.1241, 1.1247 and 1.1276. On the bottom side, the EUR/USD base is located at 1.0855 with vital breaks at 1.0963 and 1.0934 and 1.0933.

Daily Trade Signals offered. We currently trading 7 currency pairs, 3 times per day, pretty much continuously 24 hours, Sunday to Friday morning EST time. We are trading EUR/USD, GBP/USD, EUR/JPY, GBP/JPY, USD/JPY, NZD/USD, AUD/USD. More ? Upon request. $300 per month. Works to 1 or 2 days for me, 20 days traders profit. I hit targets, we don’t lose, no stops, no charts, just numbers. Each Trade done in about 2 hours, 3 maximum then out and wait for next signal rounds. We all do extremely well in profits, growing accounts and yet never take chances because the opportunities come in 7 pairs, 3 times per day and around the clock. I keep it small to remain available, answer questions, assist in anyway possible.

Brian Twomey, Inside the Currency Market, btwomey.com Contact brian@btwomey.com

EUR/USD: Reforms, Levels, Ranges, Targets

The new July 1st structural changes to currency markets are surrounded by news events and the vast majority encompass European news. If ever a time existed to trade news, now is the opportune moment. Between the ECB changes and current BOE reforms to Sonia, volatility and focus shifted to not only on European economic news events and trading but 8:30 am American news will lack the prior volatility as it was known for eons. Focus for the ECB shifted in American markets from 8:30 am to now concentrate on minor news at 10:00 am but also to the London Gold Fix. Its a volatility transfer from American to European markets. The purpose for central banks to now succumb to institute wholesale structural changes is to prevent exchange rate volatility. Its a plan desired and tested by central banks for many years.

As the new structure is viewed, news events will see the big move then correct and for the bulk of trading for the day, small ranges will be the order of the session. From a volatility perspective, central banks especially the BOE and ECB viewed markets from a 24 hour perspective then realized where and when the majority of trading occurrs especially the ECB as they are the least market friendly central bank on the planet. Since news events see the best volatility and those price movements cannot be prevented, the central banks concentrated releasing vital market moving data around news events to allow the big event for the day then ranges occur. Why 10:00 am is perfect is not necessarily the Gold Fix but all central banks swoope in the markets around the noon day. Further, 10:00 am may absolves the ECB of its traditional worldwide leadership role from 8:30 am or possibily its part of the overall new time change structure in currency markets. ECB changes are in day 4 and the BOE is in progress so we’ll see how the resolution works further in days ahead.

The big EUR/USD line remains 1.1153 and a must break to go hgher yet hurdles exist. The first break points for today exist at 1.1080, 1.1084, 1.1088, 1.1093, 1.1098 then 1.1103, 1.1111, 1.1144 and 1.1153. Why 1.1153 is vital is due to breaks target next 1.1204, 1.1222 and 1.1225. All week 1.1153 will remain the big line break to move EUR/USD higher.

The big base for EUR/USD is built on 1.0897 against today’s bottom at 1.1003. Yet again many rough break points exist first at 1.0938, 1.0921 and 1.0915. Neither 1.0900’s are expected to be sen today, its a rare day for a bottom to break lower and certantly not to 1.0938.

Brian Twomey, Inside the Currency Market, btwomey.com. Interested in trade signals? my guys are stacking money everyday. contact brian@btwomey.com

EUR/USD and ECB: Structural Changes

Mentioned long ago the July 1st changes to EUR/USD instituted by the ECB and the structural changes to lead EUR/USD to trade in small ranges similar to AUD/USD. The day is here and EUR/USD appears to be now AUD/USD. The difference between AUD/USD and EUR/USD currently is AUD/USD trades daily pip ranges at 38 for weeks upon weeks while EUR/USD trades 56 daily pips. GBP/USD graduated from 67 daily pips to now 57. GBP/JPY graduated to 59, 2 pips above GBP/USD. EUR/JPY graduated to 57 and 1 pip above EUR/USD. NZD/USD is 39.

The new central bank approach to currency prices is institute double bottoms. For example, EUR/USD double bottoms today are 1.1069 and 1.1060 with the big break at 1.1090. AUD/USD double bottoms are located at 0.7467 and 0.7442 with big break at 0.7476. GBP/JPY bottoms are located at 133.39 and 133.28 with with breaks at 133.67 and 133.61. The big break points are the new support points added to not allow prices to travel further to see bottoms.

Then above movements are held in tiny increments. Upper points today for EUR/USD is first 1.1144, 1.1146, 1.1148, 1.1153 then 1.1155, 1.1158, 1.1165 then 1.1172. Under this built in pressure, maybe EUR/USD can see upper targets at 1.1190’s, highly doubtful.

The changes to currency prices are wholesale and permanently structural. The ECB in my estimation is aligning the EUR/USD price to gold since the new price structure now aligns to the Gold price. But which Gold price is the question, USD or EUR. The main purpose for the ECB for now is to stop movements and voaltility in EUR/USD pairs, so far so good in their mission.

I always viewed this development as phase two in the Silvio Gesell plan to go negative interest rates. To see fruition in economics then control of the interest and exchange rate must be part of the plan, at least that is how Gesell views exchange rates in the “Natural Economic Order”. Then the ever larger question yet to be answered is are currency prices moving to the gold standard. This appears to be the case but this will take time as changes for the ECB began July 1 yet expect all central banks to adopt the exact same control currency price and align to gold approach.

Brian Twomey, Inside the Currency Market, btwomey.com

DXY V GBP/USD: Monthly Forecast

A number of reasons to assign a Fair Value estimate to GBP/USD at 1.5600’s. The first is the new periodic start to current 4th quadrant began with the 2008 crash and fall for GBP/USD at 1.8600’s. The comporable 3000 pips from 1.5600’s to 1.8600 on the downside is found at 1.2600’s. Secondly, the 5 year average at 1.5671 is massively oversold and as much as the 200 day average. In relation to 1.2600, last Friday”s Carney comments installed a floor in GBP/USD at 1.3000 and 1.3100 and for the past week, GBP built a solid and rising base at 1.2974 as of today. Lastly, the channel top for July is located at 1.6101 and 1.6069. In order for price to see channel tops then GBP/USD must cross 1.5445, 1.5500’s and 1.5670’s.

With respect to DXY and GBP/USD, the bottoms for July are found at the DXY V GBP/USD 9 and 10 year lines at 1.3052 and 1.2961. Only the 9 and 10 year averages are in range and offer the first upside targets at 1.3683 and 1.3746. In order for GBP/USD to find inside any respective shorter term range then price must cross higher at 1.3816, 1.3894, 1.3991, 1.4012 and 1.4177. The current 2 year monthly average at 1.5133 sees first inside range at 1.4821 to offer how far GBP/USD fell from Brexit.

Not only does GBP/USD trade below every monthly average from 1 to 10 years but it trades below the 15 and 16 year averages to offer further context.

The average of the ranges from 1 to 10 year monthly averages is located at 748 and 601 pips. To exclude the 1200 and 1500 wide ranges from 9 and 10 year averages then actual ranges are found from 581 to 571. From GBP/USD 1.3200’s, bottoms would be located at 1.2700 and 1.2600 and the upside at 1.3700’s and 1.3800’s. Any upside to GBP/USD will find a reluctant follower in EUR/USD as those range pips are located at 205 and 224 pips with a big break point from monthly averages at 1.1454.

The monthly strategy is rather than short due to severe oversold but long any and all drops

Brian Twomey, Inside the Currency Market, btwomey.com Contact: brian@btwomey.com

GBP/USD and GBP/JPY: Levels, Ranges, Targets

GBP/USD currently price is built upon a base at 1.2974 and coincides to GBP/JPY at 133.11. Today’s bottoms in both pairs are found at GBP/USD 1.3198 and GBP/JPY at 135.41. Intervals are wide for both pairs due because daily GBP/USD pips are valued at now 67 daily but more importantly monthly GBP/USD V DXY ranges are located at 500 to 600 pips and twice easily the range pips of EUR/USD. GBP/USD contains for the month of July the best volatility at 600 range pips and 67 daily.

GBP/USD next most important break above is located at 1.3270 and coincides to EUR/USD at 1.1157 and 1.1165 as well as GBP/JPY 136.64. GBP/USD, GBP/JPY and EUR/USD are on the verge of big must breaks to go higher.

GBP/USD next big break point overall is found at 1.3398 and 1.3317 to target next vitals at 1.3562 and 1.3572. GBP/JPY next vital breaks are loacted at 137.46 to target 139.25 and 139.15. Overall, GBP/JPY supports in the 135.00’s are many and massive from 135.09 to 135.55.

What’s holding GBP/USD and GBP/JPY progress higher is EUR/USD at 1.1157 and 1.1164 as well as EUR/JPY stuck between 114.48 and 114.15 with bottoms in both at 1.1084 EUR/USD and 113.74 EUR/JPY. The current driver today to determine direction is EUR/USD as GBP/USD will fail to see upper targets at 1.3201, 1.3298 and 1.3289.

Brian Twomey, Inside the Currency Market, btwomey.com, contact brian@btwomey.com

I’m doing Trade signals daily, currently 8 pairs, 3 times per day, $300 monthly per person if qualified. I hit daily targets and grow grow accounts exponentially

OCR and RBA

OCR at 1.75 is currently below every monthly average from 1 to 10 years. To understand the current low position in OCR, extreme bottoms are found at 1.69, 1.47, 1.42 and 1.12 although 1.12 is not only ever expected but 1.12 places 1.69, 1.47 and 1.42 at far richter scale extremes. Further cuts by the RBA can only take OCR to 1.69 and 1.47 but it informs the economic situation in Australia is much worse than previously anticipated particularly in the Trade Ables V Non Trade Ables as both are Australia’s measure of overall production and exchange rate levels.

The RBA is not expected to move OCR particularly as it lacks our criteria to move. Viewed from July 2006 and well beyond, the RBA generally moves OCR in May and November and December because budget years occur around June and July. The RBA moved OCR in July 3 times since 1990 and those years were 1997, 1996 and 1993.

The RBA moved OCR once in June. In the past 10 years, the RBA moved OCR 5 times in May, 6 times in November and 3 times in December. The common theme for the RBA is to move OCR in 6 month intervals starting from May to November and December. The only times to move OCR other than May, November and December is to not follow the normal patterns and hold the market guessing. Only on rare economic occasions such as June, October and December 2012 would the RBA cut in successive order.

For OCR to head higher and have any chance at normalization again, breaks must occur at the 1 year monthly average at 1.96, 2.00 and the 2 and 3 year averages at 2.16 and 2.28. Then the range becomes 2.28 to 2.49 with the next big line to cross at 2.50. Current OCR is oversold and any moves lower only forces more oversold in all averages from 1 to 10 years. If OCR ever breaks 1.96 and 2.00 then its the first sign the RBA normalizes again although not expected any time soon.

Like UK’s Sonia, OCR natural interest rate equilibrium is found at 2.86. Overall, OCR is not only low but current levels are literally on the floor. Targets begin at 1.87, 1.91, 2.01, 2.03, 2.09, 2.12, 2.23 and 2.39. Undr such oversold the RBA is not expected to lower OCR again.

Brian Twomey, Inside the Currency Market, btwomey.com contact brian@btwomey.com

EUR/USD V DXY: July Monthly Forecasts

Since November and every month thereafter, EUR/USD and DXY is explained by the 1 and 2 year monthly averages. DXY in June ranged 290 pips from important break points at 96.87 to 93.97 while this month the DXY range restricts to 221 pips from vital monthly average break points at 96.80 to 94.59. EUR/USD last month contained a range at 462 pips from 1.1552 to 1.1090. For July, the range compresses to 348 pips from vital monthly average breaks at 1.1454 to 1.1106.

EUR/USD from 1.1106 as a 348 range places EUR/USD at 1.1454 and below at 1.0758. Problem with 1.0758 is a big bottom exists at 1.0868 then a confluence of supports at 1.0789, 1.0764 and 1.0745. Vital breaks for the month below are located at 1.1083 and 1.1012. Recall last month’s 1.1090 at the one year average is now 1.1083 as support, a 7 pip drop and rise to 1.1106 and a 16 pip rise. 1.1106 and 1.1083 will serve as tough supports moving forward and must breaks for any downsides.

For the upside, big breaks lie just ahead of the 1.1134 close at 1.1143, 1.1154, 1.1182, 1.1184 and 1.1198. Then comes 1.1279 and 1.1311, 1.1365, 1.1377, 1.1380 and 1.1411. Most important breaks overall 1.1154 and 1.1279, both are dropping by the day.

While 348 maybe range pips based on averages, actual pip ranges are located at 205 and 224 and places the range from 224 and 1.1106 at 1.1330 and 1.0882. Viewed from 1.1444, 1.1230 and 1.1279 would become a confluence of vital breaks and must crack to go higher.

From a 1 and 2 year trend line perspective in a longer term view, EUR/USD bottoms are found at 1.0648 and 1.0346 and 1.0306 while tops are located at 1.1600’s and 1.1700’s. Why range restrictions and short term views that lack trend over 7 months is due from EUR/USD trades far above the 1 year line and far below the 2 year. Upper average trend line prices cluster directly on the line alongside DXY and awaits impetus for a sure directional trend. Currently none exists and its DXY and Yellen holding progress.

While DXY 221 ranges exist from averages from 96.80 to 94.59, actual ranges are found from 305, 311 and 329 pips. Consistent with the range anomaly is tops are found in DXY from 98.39, 98.33, 98.15, 98.00, 97.91, 97.86, 97.79, 97.25 and 97.11. For DXY to see a break at 96.80 and upper decks to 98.00’s, EUR/USD must travel to 1.0800’s and 1.0800.

From the 95.72 close, next above points exist at 96.05, 96.34, 96.67, 96.70 , 95.95 then break at 96.80. Below points are located at 95.59, 95.48, 95.34, 95.27, 94.62, 94.60, 94.28 then 93.76. On a break of 94.59 then next comes 93.76 and 93.74. In a longer term view, DXY overall bottoms are found at 92.67, 92.08 and 91.98.

The EUR/USD path of least resistance is short on breaks of 1.1106 and hold at descending 1.1154 and 1.1279.

Brian Twomey, Inside the Currency Market, btwomey.com, brian@btwomey.com

Sonia: Reforms, Levels, Ranges, Targets

80% of UK’s trading in benchmark overnight interest rate termed Sonia occurs in London, 12% in Brussels and 98% derived from all Europe. Aggregate volume totals last month were 8 to 10 billion GBP and consistent against 10 billion monthly trade in European overnight Eonia. Since July 2015, proposed reforms to enhance Sonia trading by banks and Building Societies are in advanced consultative stages alongside expected completion by Q2 2017. Banks, traders, Building Societies are currently testing operational changes, risks and new system development.

The UK’s system in design and trade in interest rates is one of the most robust and stable systems ever designed. Nations formerly pegged to GBP over the past 200 years such as Australia, New Zealand and Canada all designed their own system of interest rates based on the UK although with slight variations. The robustness of the UK design allowed London now and far from the past to become the home of finance in bond offerings and exchange rates. Therefore the only major changes to occur in Sonia is a time change but its the most profound and consistent with other central banks in redesign of interest rates by looking inward rather than outside its own borders.

Traditional release of Sonia occurred at 5:30 am NY time and consistent with the London Gold Fix. The new 4:00 am NY proposed time change will transpire between 3:30 and 4:30 am NY against GBP news releases and after the 2:30 am Mumbai currency Fix. As the Europeans plan to limit volatility by its interest rate redesign, the UK proposes enhanced volatility in GBP and all UK markets by Sonia time changes. The question will GBP volatility roll over into American markets is yet not known.

Based on Sonia current redesign efforts, Carney’s proposed interest rate drop comments maybe on hold until after Q2 2017 unless the UK deterioriates or tradgedy strikes. Add the fact of June’s low occurred Friday in Sonia at 0.4589 and places a floor on GBP/USD at 1.3100 to 1.3200.

Knut Wicksell’s equilibrium, natural, neutral interest rate for the UK based on Sonia monthly averages from 1 to 20 years is found at 1.888 and derived from the 20 year average high at 3.3368 to 0.4408 lows. The level at 1.888 is located just above the 10 year average at 1.6501 yet just below the 12 year average at 2.1141.

Traditional Wicksellian equilibrium is defined in economic terms as the location of the interest rate viewed from 20 to 50 year averages. The purpose is to define price stability and monetary policy in terms of to tight or to loose in money supplies. A current interest rate above the natural rate restricts economic activity and leads to lower prices while an interest rate below the natural rate leads to higher prices and enhanced economic activity.

With increased QE and higher money supplies particularly M1, the natural rate was redefined operationally post 2008 to the point where interest rate borrowers profit, supply equals demand, economy performs and the money supply is at a correct level. Obviously QE failed the equation as money is to loose and must restrict in order for economies to revive after an 8 year hiatus.

Taken from the ECB example and an example that holds true for every nation, Eonia and M1 negatively correlate at 85%. The BOE adopted QE and rising M1 while Sonia was 5.000 before the crisis and steadily declined to current historic lows not seen since Sonia was introduced in 1997.

Overall ranges for Sonia are found from 0.4918, 0.4987 highs to 0.4204 lows although many points exist in between. The next point breaks below are 0.4574, 0.4567, 0.4561 then 0.4504. Below 0.4505 comes next 0.4498, 0.4416, 0.4408, 0.4329 and 0.4322. Below 0.4322 point breaks comes next range breaks at 0.4266, 0.4257, 0.4245, 0.4231 and 0.4204. Most important breaks are 0.4416 and 0.4408.

Above points from the 0.4589 close, 0.4605, 0.4611, 0.4622, 0.4627 and 0.4645. The most significant break is 0.4645. Range points come next at 0.4649 and 0.4653.

Current 0.4589 is located at targets 0.4587, 0.4585 and 0.4569. The upper target at the 5 year average aligns as 0.4918 and happens to be most oversold in GBP/USD among the longr term averages. Then targets begin a descent to 0.4300’s and 0.4200’s.
In order for Sonia to travel higher or for Carney to ever raise then the 8 year average at 0.7414 must break higher. Then comes the 9 year average at 1.2758. The 8 year average is the major delineation line among all averages from 1 to 20 years. Currently Sonia trades between the 6 and 4 year monthly averages from 0.4645 to 0.4408 and an average of 0.4526. Overall what drives Sonia rates are averages from 1 to 8 years. The 3 and 4 year averages at 0.4416 and 0.4408 restrict any Sonia rises as they become overbought yet Sonia contains hurdles at the 1, 6 and 7 year averages at 0.4611, 0.4645 and 0.4622. Crossovers in the 6 and 7 year averages occurred as both crossed above averages from 1 to 5 years.

Sonia is an acronym for Sterling Overnight Index Average and its an average between the difference of secured V unsecured transactions in UK interest rates to include Repo rates, OIS rates and other interest rates. Sonia, unlike other nations interest rates, is a pure capitalist interest rate and its allowed free movement. Enhanced participation and trading in Sonia by time changes will see terrific volatility in days and months ahead to all UK financial instruments.

Brian Twomey, Inside the Currency Market, btwomey.com, brian@btwomey.com

EUR/USD V DXY Monthly

Setting up for monthly views, Turns out, math portal adds to the long list of online calculators to not allow the calculator results to be seen by me nor the public. Any suggestions feel feel

EUR/USD

1.1135,1.1228,1.1311,1.1339,1.1099,1.1092,1.0859,1.0877,1.0736,1.1235,1.1221,1.1139,1.0995,1.1213,1.1149,1.0779,1.0837,1.1349,1.1621,1.2331,1.2472,1.2672,1.2901,1.3316,1.3539,1.3592,1.3732,1.3812,1.3822,1.3658,1.3610,1.3703,1.3492,1.3634,1.3347,1.3309,1.3080,1.3188,1.2982,1.3026,1.2963,1.3359,1.3288,1.3119,1.2827,1.2974,1.2855,1.2399,1.2288,1.2526,1.2788,1.3161,1.3201,1.3224,1.2904,1.3179,1.3555,1.3706,1.3770,1.4343,1.4264,1.4388,1.4348,1.4441,1.3996,1.3648,1.3359,1.3220,1.3660,1.3897,1.3067,1.2894,1.2767,1.2208,1.2565,1.3405,1.3568,1.3685,1.4272,1.4613,1.4911,1.4816,1.4561,1.4268,1.4087,1.4016,1.3650,1.3190,1.3049,1.2784,1.3238,1.3449,1.2732,1.3322,1.4369,1.4975,1.5769,1.5552,1.5557,1.5750,1.5526,1.4748,1.4717,1.4570,1.4683,1.4227,1.3896,1.3622,1.3715,1.3418,1.3511,1.3516,1.3241,1.3074,1.2998,1.3212,1.2881,1.2611,1.2730,1.2811

DXY Data

95.72,96.20,95.88,93.05,94.58,98.22,99.65,98.75,100.21,97.02,96.48,95.85,97.44,95.66,96.99,94.71,98.66,95.32,95.00,90.65,88.41,87.02,86.05,82.78,81.52,79.81,80.40,79.53,80.25,79.72,81.40,80.19,80.66,80.26,80.32,82.14,81.54,83.38,83.40,81.81,83.17,82.00,79.23,79.87,80.16,79.99,80.03,81.22,82.71,81.75,83.13,78.85,79.14,78.79,79.42,80.52,78.49,76.31,79.08,74.17,74.04,74.64,74.70,73.11,76.07,76.92,77.86,79.79,81.27,77.46,78.94,83.25,81.66,86.28,86.67,81.99,81.29,80.44,79.65,78.22,74.94,76.47,76.86,78.22,78.45,80.42,79.43,84.78,85.89,88.15,86.46,82.15,86.70,86.34,79.36,77.50,73.42,72.80,72.95,72.72,72.17,73.75,75.28,76.70,76.17,76.46,77.62,80.75,80.66,81.69,82.25,81.30,82.66,83.50,84.43,83.43,82.85,85.11,85.68,85.02

EUR/USD V DXY 10 Year Regression Line

http://www.mathportal.org/calculators/statistics-calculator/correlation-and-regression-calculator.php

DXY V EUR/USD 10 year Regression Line

http://www.mathportal.org/calculators/statistics-calculator/correlation-and-regression-calculator.php

EUR/USD V DXY 5 Year Regression Line

http://www.mathportal.org/calculators/statistics-calculator/correlation-and-regression-calculator.php

DXY V EUR/USD 5 Year Regression Line

http://www.mathportal.org/calculators/statistics-calculator/correlation-and-regression-calculator.php

EUR/USD V DXY 2 Year Regression Line

http://www.mathportal.org/calculators/statistics-calculator/correlation-and-regression-calculator.php

DXY V EUR/USD 2 Year Regression Line

http://www.mathportal.org/calculators/statistics-calculator/correlation-and-regression-calculator.php

EUR/USD V DXY 1 Year

http://www.mathportal.org/calculators/statistics-calculator/correlation-and-regression-calculator.php

DXY V EUR/USD 1 Year

http://www.mathportal.org/calculators/statistics-calculator/correlation-and-regression-calculator.php

Brian Twomey, Inside the Currency Market, btwomey.com Contact brian@btwomey.com