EUR/USD and Trade: Levels, Ranges, Targets

From the Hoover Memoirs, the Europeans privately asked many times from the United States to import Inflation. In the 1920′ and 1930’s, central bank and government fiscal policy was devoted to success of private company interests. In the 1920’s and 1930’s, Tariffs and Import quotas were imposed by nations to protect disaster in domestic markets from foreign competition. The purpose was to gain “Competitive Advantage”, to depreciate currency prices in relation to the next nation’s exchange rate. The purpose was gain Export advantage.
The worst case of the exciting 1930’s “Currency Wars” was France and Britain as the French nearly destroyed GBP and in turn the UK and its why the French and Brits hardly communicate to current day.
I don’t see problems in Trump’s Trade Representative Navarro to utter public comments regarding nation’s purpose to devalue exchange rate prices. Its been the central bank goal and today is no different than the 1920’s, 1930’s and later 1960’s Currency devaluations. The difference between then and now is 1920’s and 1930’s were formulated as actual policy while today lacks a policy, so far but its early for Trump’s administration.
The goal of the post 2008 period and failure of central banks, Fiscal policy and Forward Guidance was lower interest rates and depreciate the currency price to the lowest common denominator. This mission was complete. Why Trade moves to bilateral is practically every currency price is near Parity versus each others exchange rate. Exchange rates today are just trading and playing around the edges of Parity against each other. The odd ball currency pair is GBP and GBP will remain the odd man out because of the effects from the 4.86 peg to Gold in 1931.
Navarro’s truthful comments resulted in what 50 pips higher in EUR/USD as the best response. Did we hear from the ECB or Europe yet, no but again, Europe has been fast asleep for many years.
EUR/USD. Main break points are located from 1.0914 to 1.0695. What’s vital to 1.0914 is the next range break point above at 1.0944 then 1.1104 and 1.1156. Below range break comes first at 1.0615 then 1.0519.
1.0790 is vital above as this break leads to 1.0807, 1.0836, 1.0852 and 1.0861. Above, EUR/USD can’t hold much in the way of gains becaue the price curve is way way overbought.
Below bottoms are locate at 1.0731, 1.0726, 1.0707 then break point at 1.0695 to lead to 1.0621. Same old strategy, sell the rallies.
 

Brian Twomey, Inside the Currency Market, btwomey.com

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Fed Funds and Taylor Rules

Two methods to view Taylor Rules. The first, 0.5 in the first formula is employed as the Coefficient to hold the balance throughout the full calculations. Current Inflation is also employed rather than the second method to use 1.5 and Inflation Target of 2.0%. Both are valid as a view into not only Fed Funds and levels but the Output Gap measured by GDP minus GDP is at current 0.2 and matches Inflation at 0.2. The Out Put Gap at 0.2 is extraordinarily low.
To use the 90 day rate at 0.51 for the first formula then current Fed Funds should be at 0.69 and close to the current 0.66 close price over the past months. To use actual 0.66 Fed Funds then the current rate should be located at 0.84. The range overall, 0.69 to 0.84.
To use the second method as is the way for the RBNZ at 1.5, the 2.0% target and 90 day interest rate then FED Funds should be targeted at 0.46. What 0.46 represents is support for the 1 month interest rate as it closed today at 0.48. This is Yellen’s Floor for Fed Funds and must rise to see any shot to raise. But the Output Gap must move higher.
Here’s what we’re working with in the first method. Current PCE + 0.5 X ( Inflation minus Inflation) + 0.5 X ( GDP Minus GDP) + Interest Rate. Inflation 1.6 minus Inflation 1.4 = 0.2 while GDP 1.9 minus GDP 1.7 = 0.2. Today’s 90 day close at 0.51 factored offers Fed Funds at 0.694 while actual Fed funds used offers 0.84. . For context, the 10 year real yield factors to 0.88 while 10’s minus 2’s equals 1.27. The 10 Year minus 3 month 1.97. Doesn’t speak much regarding a raise anytime soon.

The second Method Fed Funds target = 90 day + Inflation target + 1.5 X (Inflation minus Inflation) + 0.5 X ( GDP Minus GDP ). Here we have Fed Funds at 0.46 so overall range 0.46 to 0.84.

 

Brian Twomey, Inside the Currency Market, btwomey.com

AUD/USD and EUR/USD: Levels, Ranges, Targets

    AUD for the week.  Most important break point 0.7597. This point is very strong. A break can only see 0.7600, 0.7609 and highest at 0.7621. Short sell points, 0.7578 and 0.7585.
  Then bottoms. 0.7498 is strongest break point. Most immediate long point 0.7517 and 0.7506. The exact point to watch for break lower or bounce higher is 0.7528.
 As far as overbought or oversold, AUD is neither overbought or oversold.
 The week strategy is sell any rallies because resistance points above is many and very strong.
                EUR/USD
 EUR/USD 2 most important break points 1.0853 and 1.0657. Resistance points 1.0791 and 1.0794. Then 1.0821 and 1.0848.
 Why 1.0853 is because its the path to 1.1074 upon a break.
 Below 1.0682, 1.0692 are big break points. Should 1.0657 break then 1.0621 and 1.0587.
 I would take the short strategy.
   Brian Twomey, Inside the Currency Market, btwomey.com

The NAFTA Cross: CAD/MXN

Since NAFTA went into effect January 1994, CAD/MXN rose to prominence and named the “NAFTA Cross” due to exchange rate sensitivities to bilateral trade and Immigration.
At current 15.88, CAD/MXN trades at lifetime highs since 1960. In November 2016, CAD/MXN traded 13.68 and 16.68 January 2017. At NAFTA passage from monthly averages, CAD/MXN traded 2.73 and 23 years later, now trades at 16.00’s. On a 1 year basis, CAD/MXN traded to lows from 12.93 and highs at 16.58 for a 28 % difference from lows to highs. CAD/MXN price on a 1 year basis varied 3.9% and 4.07% in MXN/CAD. In 1960, CAD/MXN traded at 0.01 while MXN/CAD traded 76.08 and now 0.06 to achieve lifetime lows.
To understand CAD/MXN volatility, the ultimate market risk barometer and Commodity cross CAD/ZAR traded in the past 2 years from 9.0 to 11.00 highs and EUR/JPY as most widely traded risk asset every year since 2001, traded from 116.00 to 141.00. CAD/MXN volatility is running almost 2 times its market risk asset barometers to reveal far more is going on than normal market movements and its the Mexico side offering such volatility.
Former Institutional Revolutionary Party President Zedillo now threatens to file WTO complaints regarding Trump’s “Border Tax” which may in actuality become a transfer tax other than on products such as a Visa Tax and tax on border crossing by persons. Vicente Fox another former IRP president again hailed invectives towards Trump for his pay for the wall actions.
The reminder in this trade scenario is Trump’s goal is to bring back American car companies to American soil. Possibly Zedillo and Fox should focus on Honda, Nissan and Toyota for manufacturing plant establishment in Mexico and the US. Zedillo and Fox both presided over NAFTA as presidents from 1994 to 2006 but NAFTA and multilateral trade deals began in 1947 under GATT, are now moving towards strict bilateral deals.
As Mexico growth is tied to the US business cycle, austerity and tax increase measures are coming to Mexico for the first time in 9 years based on Mexico’s September budget release. As new Finance Minister Meade highlights, Mexico will cut spending 1.7%, 240 billion Pesos, 13 billion USD or factored to 1.2 % of GDP.
GDP is forecast at 2% to 3% for 2017 and 2.5% by end 2018 however under a volatile MXN exchange rate and as public disputes rise further, forecasts may change radically and particularly when USD/MXN was budgeted to 18.2. USD/MXN now trades 20.89. GDP in Q3 2016 was 2.0 against current unemployment at 3.6%, Industrial Production minus 0.6 and negative credit rating outlooks by Fitch, Moody’s and S&P.
Bank of Mexico Carstens highlights in a recent speech Inflation was below expectations for 17 consecutive months but began to show a slight increase in October 2016 based on higher oil prices in the US and from exchange rate dynamics. Inflation target by Banxico is 3%.
The 10 year yield traded November 6.22%, gapped to 7.20 and trades January at 7.81. Mexico’s overnight rate TIIE traded December 5.85, November 5.34 and January 6.15. Cete 28 day government auctions traded November 5.15, December 5.84 and January 5.77. February 2016, Mexico’s main interest rate was raised to current 3.75 at the same time Banxico sold 2 billion USD. USD/MXN on the day dropped about 4%. All interest rates are extraordinarily high.
Banxico again intervened to rescue the exchange rate January 5th by selling $1 billion or 1 Yard of USD. The Foreign Exchange Commission in Mexico drives and decides MXN interventions and normally lays out policy long before actual interventions. But MXN is in current extraordinary circumstances. Banxico last intervened Feb 2016 and prior to 2016 was 2011 at USD 351 million.
CAD/MXN is far more overbought than MXN/CAD. CAD/MXN currently sits above vital break points at 15.62 and 15.19. MXN/CAD sits just below vital break points at 0.0659 and 0.0641. Any uptrend and lasting in MXN/CAD must break 0.0780.
USD/MXN from 20.89 is far overbought and must break 20.65 and 20.25. MXN/USD is oversold from current 0.0479 and must break above 0.0485 and 0.0495. Expect much volatility to continue.

 

Brian Twomey, Inside the Currency Market, btwomey.com

 

EUR/USD and Mexico: Levels, Ranges, Targets

Mexican President Pena Nieto hails from the dominant Institutional Revolutionary Party, dominant means for the past 132 years and ruling for the past 57. The IRP in context is a pro business party and shares the same free market perspectives as Trump and the United States Republican party. Before Mexico manufactured autos for US imports, majority exports were oil, Silver, cement and arts and crafts. A time once existed when MXN was driven by Oil, Silver and cement. The question should Trump deal with Mexico on the wall issue so the IRP remains in power, doesn’t fall to the leftist parties and because Mexico is not only the gateway to Central American nations but a fall in the IRP may mean chaos if the left parties assume power.
Other issue to the Wall and highlighted this week by UBS in a research report is Mexican workers in the United States provides Mexico 2 to 3% of GDP by Remittances and its Mexico’s asset to accumulate foreign exchange reserves. Mexicans employed in the United States transfer weekly money home and after 2 and 3 years work, head home to a house, farm, auto and children’s college money. Not only are assets paid but plenty of cash exists to live comfortably for many many years. The IRP once provided border crossing road maps.
EUR/USD. Range currently 1.0824 to 1.0606. Most vital lines to cross above are 1.0693, 1.0723 and 1.0741. Then 1.0753, 1.0765 and 1.0775. Bottoms today are located at 1.0616 and 1.0614. Top of the channel is located at 1.0765 and 1.0799.
Further most bottoms 1.0599, 1.0573, and 1.0516.

 

Brian Twomey, Inside the Currency Market, btwomey.com

Trump, Political Challenges and Historic Perspective

Political thought since WW 1 falls into three categories: Communism, Fascism and Capitalism. Russia’s Communism and Fascism under Italy and Japan temporarily married Capitalism with the US, Britain and France by treaty to form as allies. The Entente as the allies were known fought Fascism under Germany and the Arabs under the Ottoman Empire. Later, Russia left and dominant ideological thought remains to present day.
The concept of Populism as an ideological thought is not only non existent as a term and definition but it was ascribed to Reagan and will continue attribution to Trump by the enemies of 100 year old Capitalism. Populism derives its name from the 1900’s Progressive, anti Capitalist movement as the evolution was popular yet thought only as temporary.
Enemies of Capitalism are Communism and Fascism and each shared a 100 year rise since the 1860’s industrial revolution under Karl Marx yet it strengthened every 10 years under Democratic Party Presidential Administrations starting with foundations under Woodrow Wilson and Franklin Roosevelt. Both laid the foundations for further Democratic Party Administrations to build coalitions through policy from government for the purpose to grow government. As government grew in the name of social policies, capitalism was absorbed into government’s orbit and later created terms such as big government liberalism V small government conservatism. The terms are a complete rewrite of historical facts.
George Orwell informed in 1984 when Winston was a prisoner in the Ministry of Love ” who controls the past, controls the future and who controls the present, controls the past. ” Classic Liberal beliefs under Republicans are free market, small government Capitalists while the big government Democratic movement are the unyielding Conservatives. Trump and Republicans would fall into minority status as forced acceptance of government won the day.
The dividing line of small government and private sector growth under Capitalist practices would soon leave in favor of bigger government as solutions to every social and business problem in every succeeding generation. The result in the modern day was not only government as a failure but the oxymoron is government became the most successful organization the world has ever seen as government imposed its tax policy will against Capitalist practices.
Trump understands this modern day disaster as a business person and its why Trump’s mission is to rightsize the lopsided destruction caused by government. Trump is a pure pragmatist but subordinated to his own guiding principles and its why he fails under Liberal / Conservative thought lines that contained former Republican presidential successes. As a pragmatist and not beholden to preconceived liberal / conservative thought then allows Trump to freely achieve his policy mission in a ” do whatever it takes mentality”. Do whatever it takes is Trump’s greatest strength, least understood and even feared because its not defined nor was ever seen by a modern day president since Franklin Roosevelt.
Franklin Roosevelt was the last president to invent, craft, create and even take a sledgehammer to traditional Capitalist policy. Roosevelt made it up as he went along and he was a colossal failure for Capitalism but all policy was done for the purpose to grow government and in this regard, he was a success. Trump is Roosevelt’s complete ideological opposite as he comes from pure Capitalism to cut government’s power, size, control, reach and taxing power.
Trump’s “do whatever it takes” requires not an invention but a sledghammer to current policy and it allows Trump to work within the confines of the political system to bring Capitalism back to the masses and private sector.
The power of Trump is found in the landslide votes received in states and counties and its where he will find his success as he cuts government, allows the masses to prosper and maintain presence in the White House to 2024. The lines are drawn and confrontations will be seen from Trump and voters Vs 100 year entrenched communist thought and interests inside government as well as the private organizations established to support the government movement.
Trump signalled this confrontation long ago as he called his voters and continues to speak directly to his voters as a movement. When Income taxes passed under Wilson in 1913 and the 1935 Wagner Act passed under Roosevelt to allow unions, the 100 year government movement began its decade after decade march. Trump has every ability to not only cut the movement down to size, change its direction but possibly destroy it . Trump would classify then as the only President beside Reagan to ever seriously and directly challenge the small elite yet well financed government movement.
Trump’s immediate confrontations and opposition to hear and understand his capitalist policy message is derived from the news media as the media surrendered to powers of the government movement dating to at least the 1970’s. The news media’s job as the first line of defense for the Democratic Party is define Trump, his policies and place both inside a box to take down Trump and policy.
Trump’s job and press briefing mission is speak directly to the masses to identify false reporting, hit hard and marginalize reporters and organization who refuse to conform to the forgotten practices of Journalism. The fight is in the correct message as Alinsky meets Alinsky in Rules for Radicals number 13 to freeze the target, personalize and polarize.
The unknown in Trump’s capitalist movement is the type of private/ Democratic Party financed organizations now forming to directly challenge Trump and his message.
Organizations and protests under Reagan included Unions, Peace, Hollywood, Civil and Gay rights. The news media assisted in story after story in mind control how Reagan would create war, workers would lose jobs, Americans would lose Government benefits and persons of color would lose civil rights. Protests then were limited to specific cities while today a sophistication was brought by the multi city mass protest and specific to an issue such as Black Lives Matter, Occupy Wall Street and the Women’s March.
The anti economic Trump message will surely arrive and hit hard as the Democratic Party is not only masters of movement creation but with news media assistance, masters of the message.
Trump’s first priority must be cut taxes to allow voters and masses to retain money but also to bring economic success, long lost over the past eight years. Once voters and masses are strengthened, speed to further policy successes will gain momentum and opposition will diminish, never disappear only subside because preconceived ideological thought never disappears.
Trump’s presidency represents more than the 100 year Capitalist / Communist divide on a collision course since ideological counterparts Theresa May rose to power in the UK. Further ideological counterparts face voters this spring in France, Germany and the Netherlands. Obummer worked hard around the world to assist Labor elections and strengthen Labor Parties. For the first time in 100 years, the free ride in the Communist/ Government movement faces serious challenges and may again see capitalism in ascendancy.

GBP/USD: Levels, Ranges, Targets

Today’s GBP/USD range and break points are located from 1.2668 to 1.2577. UK GDP saw a 5 pip violation to 1.2673 and its the interval from next points from 1.2668 to 1.2682. The violation is a possible warning to higher GBP later although range breaks are far far away and the sell off was the result of GBP at top of its daily trading range.
The 1.2668 to 1.2577 intervals are trading ranges without significance. Range breaks above are found at 1.2802 and below at 1.2495 and 1.2422. Overall immediate 307 pip ranges 1.2802 and 1.2495 and its why we see GBP at its 1.2600’s mid points as well as the traditional BOE middle range locations.
The BOE by far are the absolute masters in terms of monitor, manage, control and regulation of their currency pairs. The opposite is the ECB and EUR and its why EUR is a far better, wider movement and more profitable currency pair to trade. The ECB compared to the BOE is fast asleep to the point of comatose in terms of their currency pair manage, monitor and regulation. The BOE is lazer beamed focused on 1.2802 and will adjust accordingly while the ECB lacks focus to EUR levels. Why BOE night and day difference from ECB is UK money markets are far more sophisticated than any central bank on the planet.
Above 1.2668 and days ahead, 1.2709 and 1.2711 is the upper target provided GBP cuts through 1.2677, 1.2682 and 1.2692. I wouldn’t push it to higher GBP yet because USD provides massive headwinds at 1.2709, 1.2722, 1.2725 then 1.2771.
Today’s bottoms are located at 1.2584 but 1.2613 to 1.2618 and 1.2607 provide massive supports. Only on a a break at 1.2577 would GBP then target 1.2565 and 1.2534.
 

Brian Twomey, Inside the Currency Market, btwomey.com

GBP/USD and GDP: Levels, Ranges, Targets

UK GDP from a Seasonally Adjusted basis and based on ONS data, the range hit minus 0.2 % in Q4 2012 and highs at 1.1% and 1.0% in Q3 2012 and Q2 2010. Overall, minus 0.2 to 1.1. Since Q 4 2012, GDP remained positive. Since 1955, Sesonally adjusted GDP trended positively on a picture perfect trend line. In 2009 saw a slight dip and GDP now sits at first ever highs.
In terms of Brexit from June 2016, GDP is not only irrelevant but Brexit’s affect from Seasonal fluctuations hasn’t deviated enough to reveal any difference.
GDP last reported at 0.6 is low , on the floor and severely oversold from all averages dating to 1990. GDP’s first resistance point is 1.00 then the range becomes 1.00 to 1.41. Above 1.41 then range becomes 1.41 to 1.60 and 1.70.
The target mid point is located at 0.91. GDP is going higher and my target is 0.91 to 1.22. The question to higher GDP is more the result of oversold rather than any shining light in the overall UK economy. Services at + 0.8 in Q4 2016 drove GDP from falling further as output measures were all down, AG minus 0.7, Manufacturing minus 1.7, Construction minus 0.4 and minus 1.4 for Production. UK has the potential but appears to lack the action plans. The shiny spot if any was the recent Theresa May speech as she has ability and will to move the UK forward.
GBP/USD from current price at 1.2632 must break 1.2647, 1.2652 and 1.2659 to target 1.2700, 1.2706 and 1.2750. GBP trades top of the range and a range from 1.2652 to 1.2558.
GBP must break 1.2558 to begin to consider lower and to cut through masses of supports. First breaks begin at 1.2633 and 1.2629 then 1.2596, 1.2586, 1.2573 and 1.2567.
Then comes the break point challenge at 1.2558 and 1.2481 and 1.2379. GBP/USD is built upon a base bottom at 1.2205.
I would caution to longs as range tops are here yet a positive GDP would send GBP higher. Overall however, GBP price along the curve is about correct at mid range. The BOE prefers and are masters to maintain GBP always at those neutral mid range points.

 

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

For interested, I’ve been nominated for best new contributor at Fxstreet.com. Votes begin tomorrow and announcements Feb 15.

EUR/USD: Levels, Ranges, Targets

Today’s EUR/USD range 1.0865 to 1.0665, 200 pips and down 2 pips from last evening. Previous range 1.0900 to 1.0698, top dropped 35 pips while bottom also dropped 33.
Mentioned bounce from 1.0715 to 1.0720, saw bottom at 1.0711 reach 1.0756. Upper most point last evening was 1.0785 and 1.0788.
Bounce and target today remains 1.0788, 1.0791 and 1.0792. Targets achieve destination upon break at 1.0751 and 1.0755. At 1.0792 is vital point to see EUR/USD 1.0801 and 1.0820.
Below bottoms from 1.0687 to 1.0700 are many points and massively strong. Main break points to see bottoms are 1.0730 and 1.0726 then home free to 1.0700’s.
Main break point overall for shorts to see much lower EUR/USD remains 1.0629. Much lower EUR/USD means 1.0595, 1.0587 and 1.0558. Then comes 1.0497, 1.0466 and 1.0361.
EUR/USD overall remains top heavy along the curve while USD sits middle range. Top heavy means any price rises are correction, direction is down and rallies meant to sell. Overall, range breaks are located at 1.0856 and 1.0957. The point of note to 1.0856 is 1.0801 and 1.0826 comes dangerously close to range point. Range points and breaks hold far more significant meaning than everyday traded levels and or bottoms and tops.
What is seen is EUR/USD levels are beginning to open wider which means more volatility is on the way in days ahead.

 

Brian Twomey, Inside the Currency Market, btwomey.com

EUR/USD: Levels, Ranges, Targets

Exclusive to fxstreet and interested readers is the ability for readers to profit easily by my trades as I continue day in and day out, year after year to hit perfect targets. EUR/USD for now is the pair I chose but it doesn’t matter which pair since perfect targets achieve in any pair and many times, multiple pairs at one time. Its quite easy to do this.
Charts and stops are needless tools that long ago left the repertoire. Currency pairs are two sided affairs where USD controls EUR as much as EUR control of USD. JPY controls EUR as much as EUR controls JPY in the EUR/JPY combination. The slash mark in currency pairs is not only deceptive to throw off the unsuspected but a PHD dissertation can be written bout that mark. All that is needed to trade currency pairs is a price.
A well known and well forecasted structure exists to currency markets and this structure hasn’t changed in literally 200 years beside a few minor changes. We’re trading under one of those minor structural changes since June 2016 and the central bank revamp. I know, understand and trade this structure as well as the few traders I assist. Everyday we trade 8 currency pairs, twice per day and hit perfect targets.
EUR/USD. This morning’s bounce came from 1.0725 and rose to reported 1.0774 and then reversed short again. Massive and many supports existed from 1.0697 to 1.0720.
Range: 1.0900 to 1.0698, now 202 pips and + 4 pips from this morning. Reported this morning EUR/USD was traveling on a correction higher and trades currently at range tops. Topside range break is located at 1.0900 and bottom range break at 1.0629 and 1.0530.
Bottoms. Located at 1.0705 but many and massive supports exists from 1.0707 to 1.0730. Look for the bounce from 1.0730 to 1.0720’s.
Levels. Bounce from bottoms takes EUR/USD to 1.0785 and 1.0788 then the reverse short again as we play ping pong. At 1.0788 top is the point holding EUR to travel higher to next level at 1.0822 and 1.0826.
EUR allows EUR/USD to travel higher as USD provides the supports.

Brian Twomey, Inside the Currency Market, btwomey.com

EUR/USD and TPP: levels, Ranges, Targets

Why Trump nullified TPP is mainly because of the Trade Dispute Resolution and its astounding difference from the new 1995 world trade arrangement in the WTO. As a reader of the TPP document and 20 year college instructor in Political Science disciplines, I inform Trump’s decision was an easy determination. Dispute Resolution in TPP offered a new “court” that would’ve rendered the United States wholly and stunningly subservient in areas of Trade disputes. Plus the resolution process from claim to decision would’ve dragged out for years. Not that WTO is any better but what the United States doesn’t want is any worse especially trade with China because China has a 10 mile long list of trade disputes in the WTO.
The United States would’ve never won a dispute under TPP nor would the United States tend towards a positive trade balance if TPP was adopted because trade favored everybody except the United States. Any wonder why America’s Bummer went to Asia first to push TPP and any wonder why Asian nations voted overwhelmingly yes to a gift laid on their shoulders. Any wonder why TPP was not offered as a Treaty in the Senate where 67 votes were needed for passage. What we find in WTO and TPP is the disastrous roads again created by Democrats Clinton and Obummer. The last year America had a positive trade Balance was the early 1970’s and a current $500 billion deficit in trade with all partners mounted every year since the 1970’s. Smart, correct and easy move for Trump.

The commonality in currency markets for the past 2 weeks is the vast majority of pairs trading inside Neutral zones. Neutral zones inform this market not only has an uncertain direction but a 2 inch candle is on the way as it happens all the time. Those EUR and GBP reversals in the last 2 weeks were the result of neutral zone trading. A few to pairs watch and levels are EUR/USD 1.0749, GBP/USD 1.2482 , USD/JPY 112.12 and EUR/JPY 120.18.
EUR/USD. Yesterday’s range was 1.0690 and 1.0697 to 1.0889, 192 pips. Today’s range is located from 1.0887 to 1.0689, 198 pips and range increse of 6 pips. Yesterday informed EUR/USD would bounce from 1.0700’s, it bounced to reported 1.0773. Friday informed EUR/USD would bounce from 1.0628, true to form in my accuracy, EUR/USD bounced to 1.0660’s.
Bottoms today are located at 1.0694 and 1.0696 and 1.0698. Good long points but massive supports exist at 1.0708, 1.0711 and 1.0714. Look for the bounce here.
Two hurdles for EUR/USD today and good sell points above are 1.0775 and 1.0779. Both lines are solid but breaks would lead EUR to 1.0803, 1.0813 and 1.0816.
Overall bottoms from a larger perspective are located at 1.0490 and 1.0385. Both destinations achieve by breaks at 1.0689 then 1.0629, 1.0558.
Its the USD side of EUR where its found a low low price while EUR overall is top heavy and any rises would see this top heavy condition worsen. This informs EUR upside will struggle, gains won’t hold and the direction is lower EUR.
Brian Twomey, Inside the Currency Market, btwomey.com

EUR/USD and Trump: Levels, Ranges, Targets

In the 1980 election, Ronald Reagan not only became President but for the first time since 1928 and Hoover, Reagan was elected from the Taft wing of the Republican Party. America then suffered from typical Democrat Party economic disasters by lefty politics mixed with Keynesian economics. Left wing politics mixed with Keynes reigns supreme in the Democrat Party and disasters always follow since Wilson in 1912.
Reagan switched to a Supply Side price system just as his 1920’s counterparts coupled with tax cuts and the 1980’s just as the 1920’s ended as economic boom periods. The news media in the 1980’s just as today in story after story informed the world Reagan would lead the world into war, depression, disaster and loss of civil liberties. Obummer’s election turned into again lefty politics mixed with Keynes and the last eight years suffered the effects despite the news media informing Obummer was the economic hero.
Reagan like Trump was considered a tough talker because he informed government was the problem not the solution. Trump informs government is the problem, not solution therefore he’s on his way to switch to a tax cut supply side economic system. Trump proposes to take Reagan one step further by cutting taxes and government plus going dead into confrontation with the 100 year government establishment built since Wilson in 1921.
Is Trump Reagan and is Trump truly a Taft Republican remains a question. Economically, the answer is clearly yes. Took Reagan about 1 year to put economic plans in place then the boom began but Reagan was allowed the typical 100 day Honeymoon period. Democrats won’t allow Trump one day of Honeymoon because their power and existence is under severe threat. The next 4 years will see confrontations never before seen in politics and confrontations will play out directly in public rather than on floors of the Senate and House because Trump must also defeat the news media so his economic message and intention is clear.

EUR/USD. Friday, EUR/USD jumped 60 + pips to 1.0680’s from reported bottom at 1.0626. EUR/USD bottoms today are located from 1.0697 to 1.0690. Here EUR/USD will bounce.
The range is located from 1.0690 to 1.0889. Along the way to 1.0889 are 2 vital break points at today’s 1.0749 and 1.0727. Above 1.0749, EUR/USD runs into brick walls from EUR and the USD side at 1.0773 and 1.0780. Why the steel walls at 1.0780 is because a break takes EUR/USD to 1.0804, 1.0817 and 1.0824.
Below 1.0727, EUR/USD runs into masses of resistance from 1.0722, 1.0713 and 1.0702. Only a break at 1.0702 challenges 1.0697 and 1.0690 to take EUR/USD lower. Low of lows is found at 1.0492 and 1.0386.

 

Brian Twomey, Inside the Currency Market, btwomey.com

Trump and Challenges Ahead

Political thought since WW 1 falls into three categories: Communism, Fascism and Capitalism. The concept of Populism is not only non existent as a term and definition but it was ascribed to Reagan and will continue attribution to Trump by the enemies of 100 year old Capitalism. Populism derives its name from the 1900’s Progressive, anti Capitalist movement as the evolution was popular yet thought only as temporary.
Enemies of Capitalism are Communism and Fascism and each shared a 100 year rise since the 1860’s industrial revolution under Karl Marx yet it strengthened every 10 years under Democratic Party Presidential Administrations starting with foundations under Woodrow Wilson and Franklin Roosevelt. Both allowed further Democratic Party Administrations to build coalitions through policy from government for the purpose to grow government. As government grew in the name of social policies, capitalism was absorbed into government’s orbit and created terms such as big government liberalism V small government conservatism.
The dividing line of small government and private sector growth under capitalist practices would soon leave in favor of bigger government as solutions to every social and business problem in every succeeding generation. The result in the modern day was not only government as a failure but the oxymoron is government became the most successful organization the world has ever seen as government imposed its tax policy will against Capitalist practices.
Trump understands this modern day disaster as a business person and its why Trump’s mission is to rightsize the destruction caused by government. Trump is a pure pragmatist but subordinated to his own guiding principles and its why he fails under Liberal / Conservative thought lines that contained former Republican presidential successes. As a pragmatist and not beholden to preconceived liberal / conservative thought then allows Trump to freely achieve his policy mission in a ” do whatever it takes mentality”. Do whatever it takes is Trump’s greatest strength, least understood and even feared because its not defined nor was ever seen by a modern day president since Franklin Roosevelt.
The power of Trump is found in the landslide votes received in states and counties and its where he will find his success as he cuts government, allows the masses to prosper and maintain presence in the White House to 2024. The lines are drawn and confrontations will be seen from Trump and  voters Vs 100 year entrenched communist thought and interests inside government as well as the private organizations established to support the government movement.
Trump signaled this confrontation long ago as he called his voters and continues to speak directly to his voters as a movement. When Income taxes passed under Wilson in 1913 and the 1935 Wagner Act passed under Roosevelt to allow unions, the 100 year government movement began its decade after decade march. Trump has every ability to not only cut the movement down to size, change its direction and possibly destroy it . Trump would classify then as the only President beside Reagan to ever seriously and directly challenge the small elite yet well financed government movement.
Trump’s immediate confrontations and opposition to hear and understand his capitalist policy message is derived from the news media as the media surrendered to powers of the government movement dating to at least the 1970’s. The news media’s job as the first line of defense for the Democratic Party is define Trump, his policies and place both inside a box to take down Trump and policy.
Trump’s job and press briefing mission is speak directly to the masses to identify false reporting, hit hard and marginalize reporters and organization who refuse to conform to the forgotten practices of Journalism. The fight is in the correct message as Alinsky meets Alinsky in Rules for Radicals number 13 to freeze the target, personalize and polarize.
The unknown in Trump’s capitalist movement is the type of private/ Democratic Party financed organizations now forming to directly challenge Trump and his message. Organizations and protests under Reagan included Unions, Peace, Hollywood, Civil and Gay rights. The news media assisted in story after story mind control how Reagan would create war, workers would lose jobs, Americans would lose Government benefits and persons of color would lose civil rights. Protests then were limited to specific cities while today a sophistication was brought by the multi city mass protest and specific to an issue such as Black Lives Matter and the Women’s March. The anti economic Trump message will surely arrive.
Trump’s first priority must be cut taxes to allow voters and masses to retain money but also to bring economic success, long lost over the past eight years. Once voters and masses are strengthened, speed to further policy successes will gain momentum and opposition will diminish

Trump’s presidency represents more than the 100 year Capitalist / Communist divide on a collision course since ideological counterparts Theresa May rose to power in the UK. Further ideological counterparts face voters this spring in France, Germany and the Netherlands. For the first time in 100 years, the free ride in the Communist movement faces serious challenges and may again see capitalism in ascendancy.

Brian Twomey, Inside the Currency Market, btwomey.com

EUR/USD and ECB: Levels, Ranges, Targets

Since the ECB’s negative interest rate policy Sept 2014, M1 money supply grew from 5,947.0 Euros to Q3 2016 at 7005.0. End November M1 was 10,676.0. Core CPI as the mission and price mandate of the ECB and purpose for Silvio Gesell’s negative interest rates remained stagnant at 0.8. The negative interest rate objective was raise prices, CPI. GDP annualized hovered from 1.6 to 2.2. EUR/USD lost 2500 pips from 1.3157 to current 1.0635. Draghi’s “Forward Guidance” informs by buying bonds or extending durations means the hostage crisis not only continues to negatively effect Eurozone populations but economic improvements will remain stagnant in the future.
As the BOJ in the 1990’s failed to extricate themselves from deflation by raising and lowering interest rates, targeting GDP and Current Accounts and playing with sales taxes, today’s central bankers are floundering in missions to raise prices, interest rates, wages and GDP. The BOJ is understandable as they married the failures of Keynes and adopted Keynesian economics as an ideology, evidenced by economic failure after economic failure since 1868.
In the new lost decade from 2008, its scary to witness major central banks to adopt prior Japanese economic policies under assumptions the policies will work. Economics is not the driver or purpose otherwise the world would be residing under economic booms. Lower Exchange rate levels must be the driver but to what end is questionable. Draghi’s bond buying mission informs automatically a lower EUR over time is the overall desire. The Japanese constantly laser beam focus on the exchange rate rather than focus on the economics and allow the market to meld the proper exchange rate levels. Its the backwardness of Keynes.
The last hope for the lost decade is the tag team from Trump and Theresa May. Both have ability, desire and understanding what it takes to alleviate the controlled Keynesian hostage crisis and bring prosperity back to the populations. The first missions must be eliminate the Keynesians on the respective boards and replace with supply siders and move this world forward again.
EUR/USD. Range and vital break points: 1.0820 and 1.0621. The must breaks for higher EUR is 1.0720 and 1.0754. Point 1.0754 drops daily and dramatically as the EUR trades currently inside its neutral zone. As the EUR drops, 1.0754 and 1.0720 follows. The bottoms on a larger scale are found at 1.0318, 1.0423, 1.0470 and 1.0512.
Today’s bottoms are found at 1.0628 with next breaks at 1.0584, 1.0551 and 1.0512.
No dramatic moves are expectd today because EUR is vastly intertwined with USD to inform range trading continues.

 

Brian Twomey, Inside the Currency Market, btwomey.com

Presidential Transitions Legislative History: 1963 to 2016

Presidential Transitions 1963 to Present
Since the 1960 election between Kennedy and Nixon was separated by about 113,000 popular votes and Nixon won 26 states to Kennedy’s 22, Nixon also won more counties and cities against a popular vote percentage favored by Kennedy 49.72 to Nixon’s 49.55. Kennedy was declared President due to a 303 to 219 win in the Electoral College yet the last time a contiguous presidential election captivated the public and political establishment was 1916 when Wilson defeated Charles Hughes by 23 Electoral College votes and 500, 000 popular votes.
Fully three years after the election, the question for the 88th Congress addressed for the first time in US history was how to assume and ensure a smooth transition of power. The debate centered on a public vs private option since every election’s transition to power in United States history to include Kennedy / Nixon was paid by private interests and political parties. Despite public funding vs special interest concerns, seven election cycles passed since 1937 when presidential inauguration was moved to January 20 under a new 80 day timeline to organize a new government and incorporate policy prescriptions. The Congressional Research Service reports in a 2008 paper, Kennedy not only established the Presidential Commission on Campaign Costs but Dwight Eisenhower spent $200,000 on transition expenses and Kennedy $360,000. Kennedy began the advocacy of public option when the Democratic Party funded transition costs.
The Presidential Transition Act of 1963, H.R. 4638, failed in the House, passed the Senate and later became law by Conference Report votes. Nay votes in the House total 200 Democrats Vs 143 Republicans and 20 Democrat and nine Republican yeas. Present votes accounted for 60 as 42 Democrats voted present V 18 Republicans. To total, 29 yeas V 349 nays and 60 voted present.
The Presidential Transition Act of 1963 provided for the orderly transition to power to include incoming as well as outgoing administrations. The key word to orderly is after elections because the $900,000 appropriated by law to transitions was released followed by election outcomes. Orderly also assumes a new administration because incumbents fail eligibility to receive transition funds. Covered under the 1963 law and valid today is Presidents as well as Vice Presidents, incoming as well as outgoing.
Funding to new administrations is provided to the General Service Administration whose responsibility is to assist in the transition support process by providing services, office space, communications, travel and pay to incoming and outgoing administrative staff.
The Presidential Transitions Effectiveness Act of 1988, passed in the 100th Congress increased funding to $3.5 million to incoming and $1.5 million to outgoing administrations on an Inflation adjusted basis. In kind donation transparency as well as full financial disclosures were required for support staff and transition team members. A $5,000 cap was instituted from private persons as well as full declaration of names. Full enumeration of donations were not only required but subject to audit by the Comptroller of the Currency.
The 2000 Presidential Transition Act in the 106th Congress expanded GSA duties to transition by inclusion of training to senior staff and department heads, financial disclosure from presidential nominees, workshops, briefings, training and orientation, Ethics and Presidential records. The GSA was appropriated an additional $1 million to perform its expanded duties. Transition funds were appropriated yet held until the Bush/ Gore Florida question was settled by the Supreme Court. Bush was appropriated $4.27 million and $1.83 to Clinton.
The Pre Election Presidential Transition Act of 2010 began the transfer of power from post to pre election as Transition services, plans and coordination becomes available to “eligible” candidates.
If an eligible candidate is on a sufficient number of state ballots, recognized by the Commission on Presidential Debates and is above about 50% in political polls then a candidate qualifies for GSA services until the General election. An eligible candidate must pass a security clearance under the 2004 Intelligence Reform and Terrorism Prevention Act. Candidates are eligible in May and establish a Transition Coordination Council to adjust, plan and communicate with the GSA. Candidate expenses are paid by campaigns while reimbursements from GSA funds are established by Memorandums of Understanding. For the 2016 election, $13 million was authorized to candidates and $9 million for post transition activities.
In Senate bill 1172, the Ted Kaufman and Michael Leavitt Presidential Transitions Improvements Act of 2015 addresses budgets for management and custody of presidential records for each year in office. The General Accounting Office must report to specified congressional committees final and significant regulatory actions in the last 120 days of Presidential administrations. Significant is quantified by a regulation may affect the economy by $100 million to include the environment, productivity, jobs, public works, safety, health. Significant further refers to regulations and effects to create agency inconsistencies and alter budgets on loans, entitlements, grants and user fees. Regulatory effects encompasses past as well as future administrations. Homeland Security must provide to candidates a report on threats to national security as it may relate to campaign and transition periods.
In 1963 to 1964 based on Bureau of Labor Statistics data, the Federal Government employed a total of 200,000 employees on a seasonally adjusted basis, 3.1 million by 1991 and 2.8 million today. Number of political appointments as required to report in the 2015 law must be provided to congressional committees by the Office of Personnel Management for the purpose to complete the overall mission to smooth transition to Executive power.

Brian Twomey is a 20 year college professor of Political Science, brian@btwomey.com

Mexico and Trump: Automobile Manufacturing, Imports and Exports

 

Published at dailycaller.com and upcoming at Ludwig Von Mises Institute, Auburn University, mises.org,

 

 
Von Mises long ago highlighted low interest, maintained by credit expansion misallocates capital so the production process is time consuming in relation to demand. (2001, Austrian Business Cycles). Markets then experience an allocation and misallocation process in Mises’ description to boom and bust cycles. The United States market loss in automobile manufacturing was re allocated as Mexico’s gain and an example of free markets and free trade in action. The current investigation in this paper was to answer the Trump claim is Mexico “ripping us off”. From a free market perspective, the answer is clearly Mexico was advantaged by the market and assumed the appropriate steps to profit.
As the United States low interest, high exchange rate and easy. print money policies were countered by Mexico’s rising interest ( 4.2% V 5.75%, 2011 to 2016). and low exchange rates ( MEX / USD 0.08 V 0.04, 2011 to 2016 ) to result in a flood of worldwide automobile companies establishment in Mexico for purposes to export to the United States. Boom and bust cycles are defined by the Natural Rate of interest. Mexico’s Natural Rate of interest was below its market rate and represented productive boom periods while the United States Natural rate was above it market rate.

Currently nine major automobile companies manufacture vehicles in Mexico as follows: Fiat /Chrysler Auto of Mexico, Ford, GM, Sling, Kia, Mace, Nissan, Toyota and Volkswagen. Sling is classified by the Mexican Automobile Industry Association as an exporter of autos and trucks but the predominant manufactured product are three wheeled vehicles. FCA Mexico manufactures Ram, Jeep, Fiat, Chrysler, Alfa -Romeo and Dodge.
Total Mexican exports to the United States in automobiles and trucks by all nine auto companies in 2015 was 1,919,680 and 1, 985, 944 for 2016. Autos accounted for 1,020, 755 V 965, 189 trucks. To place 1.9 in perspective, total Mexican exports worldwide for 2015 in cars and trucks for all nine companies was 2,328, 448 and 2,306, 293 for 2016.
Since 2014, total United States vehicle sales to include cars and trucks averaged about 17 million per year as a seasonally adjusted annual rate. Since 2000, the seasonally adjusted annual rate ranged from 12.5 to 17.5 with a spike low at 9.2 million in February 2009. The National Automobile Dealers Association forecasts 17.1 million for 2017. Total Vehicle sales released January 2017 by Autodata corp revealed an all time seasonally adjusted annual rate high at 18.43 V previous 17.90 million. The vast majority of vehicles listed are those manufactured in Mexico. Missing in US sales totals in relation to Mexico are high end vehicles such as BMW, Jaguar, Tesla and Porsche because Mexico lacks manufacture in luxury vehicles.
NADA further reports for the first 6 months of 2016, new vehicle sales in the US accounted for $490 million and 8.64 million sales of light duty vehicles. Light trucks will account for 60% of the total American market based on NADA estimates.
The Congressional Research Service in its November 2016 report on US / Mexico Economic Relations states, Mexico imported $30.5 billion in vehicles in 2011 and $50.5 billion in 2015. Imported Automobile parts in 2011 represented 28.5 billion and 43.7 billion in 2015. Automobile and Truck engines account for the vast majority of parts.
The clear winners in exports to the United States are FCA Mexico, Ford and GM particularly FCA and GM in truck exports as both accounted for 731, 590 of the total 965, 189. Nissan and Toyota exported 347,329 automobiles and 100, 829 trucks. Toyota manufactured 124,439 autos and trucks in 2016 and exported 124,439 vehicles to the United States. Nissan exports 95% of its vehicles to the United States and 5,911 total to Asia while Toyota imported zero vehicles to Asia. Sling, Kia and Mace hardly register while Volkswagen exported 195, 577 automobiles and is not active in the truck market.
Despite 1.9 million vehicles and a small aspect to the American market, standards to import to the United States must meet safety, bumper, emission, theft and air pollution requirements therefore a valid assumption regards the manufactured vehicles are designed for specific export to the United States. The remaining 320, 349 vehicle exports for 2016 to subtract total from US are sent primarily to South America. Mexico’s predominant export market is the United States and is the United States third largest suplier of Goods trade for 2015 based on USTR trade figures.
Fees to import into the United States are charged a Duty of 2 to 5% for autos, 25% for trucks and 3 to 3.4% for motorcycles. Duty rates are based on prices paid. Vehicles must meet an EPA Fuel Economy rating of 22.5 miles per gallon or vehicles are charged a Gas Guzzler Tax.
Imports into Mexico must pay a duty fee, state and federal taxes, Custom Processing fees and Value Added taxes. The average Duty rate for vehicles less than 5 years old is about 16% based on “Blue Book” values. The average Duty rate on other products especially NAFTA approved items is about 13.97%. A VAT tax is assessed based on sales transactions. Within the Mexican border and NAFTA approved Maquila, a fee is assessed at 11% and 16% inside Mexico’s interior and down from Apparel rates at 10.1 % and 18.4% from 1988. The governing Duty rates, revised lower in 2015 and much lower since Mexico joined GATT in 1986 are located under Article 36 in Mexico’s 2015 Customs law.
The United States Trade Balance with Mexico was negative every month since January 1994 when a positive trade balance of $302.8 million was reported. Since 1985, the only positive trade balance was reported in years 1991, 1992 and 1993. The remaining months since 1985 was negative.
President elect Trump’s argument is trade is unfair, deals are bad and “they’re ripping us off”. If the United States / Mexican automobile trade arrangement is any guide, Trump’s argument is partially correct.
Trade barriers are non existent, WTO complaints by either the US or Mexico was last reported in 2008 with a total since 1995 of 14. For perspective, Canada and the US registered 18 grievances from 1995 to 2016. The last complaint was lodged in 2016 and prior was 2008. Last time positive Balance of Payments for the United States was recorded in Total Goods and Services against all trade partners was 1960 to 1970, 1973 and 1975 as the range was 91 in 1969 and 6022 highs in 1964. The current trade deficit versus all trade partners is currently about $500 billion and accumulated to deficits every year since the 1970’s.
For the United States, Trade deficits overall appear as structural conundrums while Mexico took advantage of market structures and refutes the claim, “they’re ripping us off”. Trump now offers questionable trade barriers in possible higher Duty taxes in a state effort to lure automobile companies inside the United States.

Brian Twomey is a 20 year college professor of Political Science, brian@btwomey.com

EUR/USD: Levels, Ranges, Targets

 

Two most vital break points for EUR/USD all week: 1.0784 and 1.0549. The parity question and bottoms are located at 1.0472, 1.0432, 1.0429 and  1.0319. Actual parity upon 1.0319 break is 1.0127. The actual parity question is miles away and many many support points.

The main break points above are 1.0696 and 1.0784. Both points are dropping by the day. For my friend, 50 day average 1.0544 and 10 day 1.0535. If 1.0549 breaks lower then next targets 1.0511 then 1.0472.

Above. The rough patches are 1.0592 and 1.0599. Then the 1.0600’s rough spots from 1.0610 to 1.0648. Need break 1.0648 to go higher.

 

Brian Twomey

Major Pairs: levels, Ranges, Targets

Currency prices began the week in dangerous neutral zones and now ends the week in neutrality. Neutral zones are those locations when a currency price is stuck between 2 major support or resistance levels and trades around minor supports/ resistnce points. Normally, currency pairs fly from neutral zones and result in long candles from a market input such as an out of sync news announcement, a central bank or political figure comment. So far this week, we haven’t seen any flying yet currency pairs remain trade around significant points.
EUR/USD. Significant break points for EUR/USD are located above at 1.0687 then 1.0790 and below 1.0617 and 1.0548. The downtrend renews at 1.0548 with a break at 1.0617. Most vital is 1.0687 and 1.0548 and minor 1.0617. The levels move 1 and 2 pips per day as EUR/USD remains stuck inside its zone.
GBP/JPY. Most telling pair all week as 140.40 broke lower and remained lower. Below 140.40 is enough to stop USD/JPY and GBP/USD from significant moves. GBP/JPY needs a break higher at 140.40 or it travels lower to 138.44 and renews its downtrend.
EUR/JPY. 121.98 break higher then the uptrend begins again while 120.29 break lower would risk 118.08. GBP/JPY broke its 140.40 point, EUR/JPY has every ability to follow.
USD/JPY. Oversold USD/JPY trades between neutral zones from 112.70 to 115.65. A break higher at 115.65 renews the uptrend and break 114.17 below is first warning USD/JPY uptrend is in trouble.
NZD/USD. The signal line pair to all currency prices must break below 0.7047 or break through massive resistance at 0.7111 and 0.7187. A break below 0.7047 renews the downtrend to 0.7001.
AUD/USD. AUD runs into a brick wall at 0.7544 and a line dropping by the day. AUD must break 0.7490 to target Below 0.7452 then 0.7400. AUD remains not only stuck in neutral zones but its a lost currency pair in its price decisions.
AUD/EUR is currency overbought yet contained by rising supports below at 0.6942 and 0.6926. Both levels are enought to see AUD/USD to massive support at 0.7400.
CAD/ZAR, Trades currently 10.28 and must breaks must occur at 10.40 and 10.48 to see EUR/USD drop and USD/JPY rise. The telling point in CAD/ZAR’s 20 pip break point is the vast majority of currency pairs contain those same 20 pip break points. Its a cautious market all week.

 

Brian Twomey, Inside the Currency Market, btwomey.com

EUR/USD and the January Indicator

EUR/USD and the January Prediction

John McGinley of McGinley Dynamic fame, and former 25 year editor of the Journal of Technical Analysis is also credited in the 1980’s with the January Stock market indicator. An up January Dow predicts a higher stock market in a long tested period. How is the January effect for EUR/USD.

Since EUR/USD’s 1999 introduction and 18 years later, EUR/USD was down for January 12 years and up 6 years. Down months total averaged 591 pips while up months averaged 558. Since 2008, EUR/USD was up in January 5 times and down 5 times. Since 2008, Down months averages to 697 pips while up averages to 573 pips.
From 1999 to 2008, EUR/USD was down in January 7 times and up 3. Down months averages to 516 pips while up months averages to 518. January 2016 was the worst movement year of the 18 as EUR/USD moved down 253 pips while January 2014 follows with 290 down pips. EUR/USD best movement year was January 2009 with 1191 down pips followed by January 2016 at 1042 down pips. EUR/USD best January up month was January 2011 at 876 pips. Currently, EUR/USD is up for January 2017 at 324 pips and beats January 2016 and 2014.
A down month in January predicts EUR/USD ends in December of the same year lower 7 times since 1999. Since 2008, a down January month predicts EUR/USD lower 3 times. From 1999 to 2008, a down January predicts a lower EUR/USD in December 4 times.
From 1999 to 2008, up January months predicts EUR/USD up 2 times in December. Down January resulted in higher EUR/USD 3 times from 1999 to 2008. Down January resulted in higher EUR/USD for the year 5 times since 1999 and 2 times since 2008. Up January resulted in higher EUR/USD for the year 4 times since 1999 and 1 time since 2008. An up January resulted in a lower EUR/USD 6 times since 1999 and 3 times since 2008.
Since 1999, Down January to down December and lower EUR/USD averages 1401 pips. Up January to higher December EUR/USD averages to 1552 pips. The worst EUR/USD movement year was 2012 at 79 total pips alongside an up January candle. January down and year down best movements were 1999 at 2059 pips, 2005 at 1894, 2014 at 1681, 2015 at 1578 and 2010 at 1586 pips.
The best movement years overall were 2009 at 2337 pips, 2008 at 2343 pips, 2002 at 2106 pips and 1999 at 2059 pips. The worst movement years were 2012 at 79 pips, 2016 at 607 pips, 2011 at 876 and 2013 at 853. Worst year movements were all post 2008. Since 1999, yearly movements decreased significantly.
Overall, down January is a good barometer to a lower EUR/USD for the year with a 7 year track record while up January predicts EUR/USD higher 6 times and 3 times since 2008. Only 5 of the total 18 years saw either a January up candle with a lower EUR for the years or down candle V a higher EUR/USD. Down year see an average of 1400 pip moves. Up January to higher EUR/USD sees an average at 1552 pips.

Brian Twomey, Inside the Currency Market, btwomey.com

AUD/USD: Levels, Ranges, Targets

2 most important break points for AUD/USD this week are located at 0.7338 and 0.7239. The above area from 0.7330’s to 0.7350’s and 0.7360’s is full of many and strong resistance points.

Below, 0.7305 and 0.7302 will be tough break points below. Then comes 0.7281, 0.7277, 0.7272, 0.7269 and 0.7267. AUD is then cleared to target 0.7255, 0.7249 and 0.7239.

The AUD/USD price is low but the road higher is tough.

 

Brian Twomey, Inside the Currency Market, btwomey.com