EUR/USD V DXY : Monthly Levels, Ranges, Targets
Every month since October 2015, DXY and EUR/USD not only traded between respective 1 and 2 year monthly averages but topside compression was responsible for EUR/USD’s drop from 1.1400 to 1.0522 and DXY’s fall from 100. A massive shift is in development and it begins with DXY as DXY is now on the verge of a massive breakout higher. More importantly to a higher DXY is the ability for currency prices to finally, after 8 years, normalize. Normalization is a question of price location and critical to currency markets.
Lower DXY and EUR/USD prices were the result of both currency pairs to trade below monthly trend lines 1 to 10 years and every year in successive order. A situation of this magnitude is unhealthy to normal functioning currency markets but its a message to markets the lingering effects from 2008 remains. Healthy occurs when each pair separates and trades above or below trend lines.
EUR/USD currently trades below every trend line from 1 to 10 years while DXY trades above every trend line except the 5 and 8 year averages yet DXY is on the verge of a clean break higher. DXY and USD longs on a break higher will remain for years in the future.
DXY for October was reported a 118 pip range from 95.52 to 96.70 and the lowest range since October 2015. Actual was 364 pips from 95.39 to 99.03. The topside rose for the first time since Oct 2015.
For November, DXY sits above both its monthly 1 and 2 year averages at 96.56 and 96.36. The average range for DXY is located from 296 to 309 and places DXY 99.45 topside V 93.27. Conversely, DXY bottoms and tops places EUR/USD from 1.1460 to 1.0842.
Most vital break points are located from 96.21 to 96.42. Then lower levels 95.83, 95.78, 95.50 and 95.32. Below 95.32 comes next 94.65. Above the best DXY could achieve is 98.12 and 97. 94. A price above then leaves its monthly range.
EUR/USD Range for October reported 188 pips from 1.1294 to 1.1106 while actual range pips were 398 from 1.0832 to 1.1230. November monthly averages are located from 1.1085 to 1.1151, 66 pips. Actual range for EUR/USD is located from 214 to 197 and places EUR/USD at 1.1365 to 1.0937 and 1.0871.
Most vital break points below are 1.1085, 1.1031 and 1.1055 then 1.0980 and 1.0976 to 1.0932 then bottom at 1.0814. Above massive resistance is found first at 1.1151, 1.1174, 1.1197, then 1.1228, 1.1297 and 1.1337. Further comes 1.1418, 1.1530 and 1.1614.
Top of EUR/USD’s monthly channel is found from 1.1706, 1.1832 and 1.1931 while bottoms are located at 1.0545 and 1.0505 and mid points at 1.1238 and 1.1218.
Intraday, big line break for EUR/USD is currently 1.1088.