AUD/JPY,AUD/CHF, AUD/CAD and AUD/NZD

AUD/JPY
From close 86.60, Major break points 85.52, 85.28 and 85.08. Above break point 86.68. Uptrend must remain above 86.35 and 86.54. Below 85.08 targets downtrend lines at 84.39, 84.21 and 83.61.
AUD/CHF
From close 0.7654, Major break points 0.7619 and 0.7555. Must break to target 0.7619 is 0.7625. Uptrend line begins at 0.7683.
AUD/CAD.
From close 1.0156, Major points 1.0027, 0.9930 and 0.9927. Uptrend must remain above 1.0031, 1.0084 and 1.0146.
AUD/NZD
From close 1.0798, Major points 1.0606 and 1.0519. Below, must break 1.0736 to target downtrend lines at 1.0665 and 1.0596. Currently, over overbought.

 

Brian Twomey, Inside the Currency Market, btwomey.com

GBP/CHF, GBP/CAD, GBP/NZD and GBP/AUD

GBP/CHF
From 1.2396 close, major break points and main price drivers 1.2519 and 1.2550. Most vital 1.2519. Nothing special in GBP MA’s. Challenge to 1.2519 must break uptrend lines at 1.2449 and 1.2486. Currently oversold, good targets and most comfortable locations are 1.2420 to 1.2449.
GBP/CAD.
From 1.6440 close, Major break points 1.6475 and 1.6494. Strategy: shorts below both. Targets below are downtrend lines at 1.6378 and 1.6335. GBP/CAD trades below MA’s 5 to 100 day. 100 day 1.6461.
GBP/NZD.
From close 1.7503, Major break points below 1.7474 and 1.7429. Price above targets uptrend lines at 1.7534 and 1.7639. Below, targets downtrend lines at 1.7324 and 1.7310. GBP/NZD is the granddaddy mover among all FX currency pairs in G10. Only other pair to beat GBP/NZD is USD/BRL.
GBP/AUD.
From close 1.6197, major break points 1.6436 and 1.6613. Uptrend lines begin at 1.6261, 1.6420 and 1.6398. Wide wide ranging pair, second to GBP/NZD.

 

Brian Twomey, Inside the Currency Market, btwomey.com, Contact brian@btwomey.com, Pay Pal brian@btwomey.com. Fell free to help this site stay alive anytime.

EUR/CHF, EUR/CAD, EUR/GBP and EUR/NZD.

EUR/CHF
From 1.0700 close, broke major supports at 1.0712 and 1.0708. Higher for EUR/CHF must break both to then head to uptrend lines at 1.0743 and 1.0747. Downtrend lines begin at 1.0681 and 1.0668. Currently overbought. Main drivers are 10 and 20 day averages at 1.0655 and 1.0654. Strategy, shorts below 1.0708 and 1.0712.
EUR/CAD
From 1.4211 close, main break points are located below at 1.4093, 1.4080 and 1.4037. Uptrend begins at 1.4202 while downtrend lines start at 1.3985 and 1.3957. Main drivers are 10 and 20 day averages at 1.3961 and 1.3929. Currently overbought yet 1.4202 must break to begin downside.
EUR/GBP
From 0.8632 close, EUR/GBP remains a troubled troubled currency pair. Major break points are located below at 0.8554 and 0.8536. Main drivers are 10 and 20 day averages, both at 0.8516 and overbought. Good targets 0.8581 to 0.8577. Lower must first break 0.8598.
EUR/NZD
From close 1.5104, major break points located below at 1.4916 and 1.4907. Uptrend lines begin at 1.5028 and 1.5018. Both must break to head lower. Break at 1.4907 then next targets are downtrend lines at 1.4804 and 1.4796. Main drivers are 10, 20 and 50 day averages. Currently 20 and 50 day at 1.4768 and 1.4781 are severely overbought. Short is the way for EUR/NZD.
Brian Twomey, Inside the Currency Market, btwomey.com

Expanded CPI

Yellen and the Fed want 2% Inflation but the question 2% of what is the unknown answer. Inflation in CPI terms is defined by the BLS as either higher prices or falling dollar values. CPI is measured as average prices and reported month to month on a seasonally adjusted basis. CPI as an index was 241.43 in December’s release and rose in January 1.41 index points to 242.83. The base period is 100 from 1982.

In USD terms, a $100 item in 1982 now cost $242.83, a $10,000 automobile now cost $24,200. 83. Prices, USD values and Inflation are rising. Wages must meet or exceed Inflation or workers lose. Since 1982 or 35 years, the CPI index increased 24.59% or 0.24 per year. January was reported 0.6%, actual was 0.58%. Must take index point difference 1.41 and divide by last index 241.43 = 0.0058, then multiply by 100 to equal 0.58%. Gasoline increases were partially responsible for the 0.6 increase. Gasoline/ Oil in USD, AUD and NZD CPI Indices account for just about 0.2. Good estimation is CAD, EUR, JPY and the remainder of the world factor the same Gas/ Oil accounting at 0.2.

CPI increased 2.5% over the past 12 months. The index increased 2.5%. At 0.6%, the percentage is bumping against the 90% Confidence Interval. Is Yellen interested in this most widely reported All City CPI or the new chained C-CPI -U with a 100 base period from 1999. Possibly CPI W to account for Wage Earners and Clerical workers, or maybe CPI Transportation. Literally 100’s of CPI indices exist because CPI is tied to Wages, Social Security, Government benefits and in markets TIPS and Inflation Swaps.

Is Yellen working from the 1982 base period CPI, 1999 Chained or maybe the last 5 years. A full adjustment is done every 5 years because Seasonal V Non Seasonal is then fully calculated. March CPI is vital because it completes the full 5 year mark from 2012 to 2017. Seasonal is best for short term trend because it eliminates weather, sales, cycles, holidays. Non Seasonal is best viewed for longer trends because it takes all factors into consideration.
If 2.5% is the headline and 0.6 the Core then both figures reveal little about the overall index or the index target to meet this 2% goal. Point 2.5% is a 12 month read on the index and a small small move overall. From 0.6, point at 2% is miles away. The reporting of the information as Headline V Core is a misnomer and far to short term to assess overall CPI.
January 2012, CPI as an index was 226.65, today 242.83 and a difference of 16.1 index points. The monthly deviations in 5 years ranged from a one time report at 0.8% to minus 0.5% and seen a total of 3 times or 3 months in a 60 month period. January 2012 CPI increased 0.2% and +2.9% from 2011 to 2012. January 2017 rose 0.6% and 2.5% yearly. The monthly rose while the yearly dropped to compare one release to previous 5 years.
Yellen and the Fed state reliance on PCE. Since 2008, yearly CPI Inflation was 1.7 V 1.4 PCE. From 2000, CPI 2.4 V PCE 1.9. Core Inflation runs higher than PCE Core, 3.9% V 3.4% since 2000 and 1.7& V 1.5% since 2008 based on Cleveland Fed figures. The difference is in the weights calculated for 2 separate basket measures as CPI measures household purchases and PCE measures what businesses are selling. My question for Yellen and the Fed is where is CPI and / or PCE most comfortable in relation to Fed Funds and what are actual targets for both. Overall, I see Inflation and Fed Funds far to high.

Brian Twomey