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

 

USD/JPY break points today are located at 113.63 and 114.03 Vs 114.58 and 114.86. The bottomside are odd numbers while the topside breaks are even. The break points are not only perfect but trade information was known yesterday because its USD. We’re running today Gaps 28 Vs 40 below.
Yesterday’s EUR/USD break reported at 1.0861 was actually 1.0858. A EUR/USD forecast at 4:00 am EST will be off by 2 to 4 pips. At 5:30 Am EST, EUR/USD transforms to re price for the new day as yesterday’s information becomes pablum.
Problem at 5:30 am is Eupopean news is released at the same time as the new prices. Part of the EUR/USD volatility at 5:30 is derived from new prices and the other half to price the news release. Therefore a news release at 5;30 encounters possible deception particularly when the release encounters wild volatility. Likewise, a news release may encounter zero to low volatility as a result of the re price to EUR/USD. Most news release volatility is the result of EUR reprice because numbers to releases are extraordinarily small and because most are released as consensus forecasts. An off consensus release sees a combination of the re price from the release as well as the reprice of EUR.
EUR/USD break points today are located at 1.0751 and 1.0810 vs 1.0944 and 1.004. Is a 59 Vs 60 pip balance correct, no because its off from the correctness in USD/JPY. Further, to many even numbers in EUR and it doesn’t match its USD/JPY counterpart.
EUR/USD will reprice to reflect its USD counterpart because USD is correct and off balance as known from yesterday. When EUR reprices then all cross pairs will also re price. A support or resistance point as well as an average therefore is off before 5:30. Before 5:30, does cross pairs drive the underlying currency pair or does the cross pair drive the underlying pair.
All currency prices are derived from a 24 hour period but 24 hours is a deception because every currency pair runs differently on its 24 hour scale. This means, certain times of day are perfect to trade while other times are untouchable. Untouchable means as a general rule literally don’t touch the pair no matter what happened in its price path. GBP is not ready at 4:00. If the vital levels and break points are not known before hand then the trade is left to speculation and a gamble.
The way round a prior 5:30 am trade is to understand how to adjust supports and resistance points and its done in relation to daily pip ranges. Currency trading is an exact science and not an art or a speculative venture. USD/JPY gaps are running 28 and 40 today yet the daily pip range is 58 pips. This means good chance for a breakout today yet support and resistance points are running today at 7.25.  Since range breaks are located from 115’s to 112’s, a breakout means only break of the daily levels. USD/JPY becomes crucial if range breaks are seen because they hold far more credence than a daily break point. A break of 115 or 112 means USD/JPY higher or lower.
The currency pairs ready to trade becomes the lead currency pairs. Traditionally, AUD and NZD lead EUR while GBP also leads EUR. After 5:30, EUR becomes the overall leader against all currency pairs but its balanced against USD. AUD, NZD and GBP then find their place in between EUR and USD. In the larger scheme, CAD leads JPY and CHF as usual remains the colossal laggard. Its historic for CHF to lag CAD and JPY.

 

Brian Twomey

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