EUR/USD MA’s: Levels, Ranges, Targets

The EUR/USD position from Friday’s 1.2012 close is the approach to the 5 year average at 1.2074. At current 62 pips away from the average, USD/JPY faces the opposite corollary as 72 pips from the 107.82 close lie just below its 5 year average at 107.10. EUR/USD and USD/JPY both share the same space on the 18 year historic scale as both trade between averages 1104 day and 5 year at 1279 days.

 

The current EUR/USD range is located from the 5 year at 1.2074 and 1104 average at 1.1918. Above 1.2074, next comes 1.2096 at the 1359 day average, 1.2105 at the 4688 day average and 1.2219 at the 4432 day. The longer term 4000 day averages crossed above averages from the 3923 day to converge and rest just below the 1359 day. The same phenomenon is seen in USD/JPY. The many resistance points are many and massive and begins with 1.2074 at the 5 year and 1.2096 at the 1359 day. A break of 1.2074 represents not only a huge level but it signifies EUR is heading far higher over time.

The 18 year mid point is located from 1.2969 to 1.1051 at 1.2010. EUR/USD below 1.2074 then the mid point is located at 1.1562 and just above the 81 day average at 1.1515. Above 1.2074 then the mid point is located at 1.2521. The significance to an 81 day average is not only is it above the 75 day mid point from the 50 and 100 day but much FX activity in Forward and Hedge trading takes place at the 81 day so its level is crucial as an indicator.

Lower EUR/USD must break below 1.1918 at the 1104 day to next target 1.1624 at the specially designed average then the mid point at 1.1562 and 1.1515 at the 81 day. Only a break at the 849 day average at 1.1442 signifies EUR/USD is heading far lower to 1.1067 and 1.1051.

Most important average overall is the 10 year at current 1.2950. This average was 1.3200’s at the time of the 2008 crisis. A 10 year average is a demarcation line to represent a period over the long term. The break for example at 1.3200’s informed EUR/USD was heading lower but it would remain lower over many years. It remains the current average to contain any EUR/USD price rises as corrections against the longer term down trend that began in 2008. If 1.2950 ever broke above then EUR/USD enters a new multi year period and it heads miles higher.

A noted point is USD/JPY was represented by the 1105 average while today’s EUR/USD by the 1104 average. The system updates everyday. The 850 day yesterday is today’s 849.

81 day average = 1.1515

XXX = Specially designed average = 1.1624

337 day = 1.1051

594 = 1.1067

849 = 1.1442

1104 = 1.1918

EUR/USD close 1.2012
1279 = 5Y = 1.2074

1359 = 1.2096

1616 = 1.2335

1874 = 1.2481

2131 = 1.2678

2386 = 1.2810

2562 = 10Y = 1.2950

2642 = 1.2969

2897 = 1.2968

3153 = 1.2899

3411 = 1.2885

3590 = 14Y = 1.2844

3668 = 1.2813

3923 = 1.2644

4177 = 1.2413

4432 = 1.2219

4688 = 1.2105 = Jan 1, 1999

Brian Twomey

USD/JPY MA’s: Levels, Ranges, Targets

USD/JPY longer term averages from the 4178 day to 4787 crossed above shorter averages from 1360 day to 2643 day. The longer term averages sit from 105 to 106’s.  From USD/JPY’s close at 107.82, the 5 year average provides next support at 1017.10 then the 4787 day at 106.50, 106.26 at the 4689 day and 106.07 at the 4432 day. Only on a break of 106.07 is USD/JPY cleared for 105.67 and 105.42.

To understand the massive and many clusters of supports from 107.10 to 106.00’s is the 18 year mid point  location at 105.67. The location at 105.67 coincides to the 4178 day average. Viewed from the 113.29 highs to 107.10 lows, the mid point above is found at 110.19. USD/JPY is currently at massively oversold levels and the break from 107.10 downwards won’t be easy. Further, a break of 107.10 changes the 18 year mid point to 102.57. Breaks at the 107 and 106’s for USD/JPY represents a wholesale change.

The first major break at the 337 day average is located at 109.16 then the 1105 day at 110.08, 110.29 and the 81 day at 110.93. The noted point to 110.29 is it represents a specially designed moving average. The overall range in USD/JPY is found between 107.10 to 110.08. Only on a break of 110.93 is 112.92 up for consideration as well as the top at 113.29.

As central banks  restructured prices in currency and other associated markets, 24 hour ranges factored ahead become predictable. For Monday trade, USD/JPY will range from 107.27 lows to 108.76 highs. In the way of 108.76 is a range point at 108.30. A range point in currency trading is far more vital than a trade able level and a target. The next vital break at 107.10 is protected.

While the BOJ remains committed to bond buying stimulus against its yield control policy to contain the 10 year yield as well as negative interest rates, the proposed Consumption tax slated for October 2019 is a warning.  All past Japanese economic experiments failed as a result of an economic tax. In the 1980′ to 1990’s, the Sales tax impaired the recovery. In 2010 and 2011, the 10% Sales and 10% Dividend tax impaired the recovery. In 11 Japanese economic experiments since the 1940’s, the tax failed to see the economic experiment come to fruition.

As a result, GDP for fiscal 2017 based on BOJ forecasts are slated for 1.5 to 1.8, then 1.1 to 1.5 for fiscal 2018 and 0.7 to 0.8 for fiscal 2019. Fiscal years for the BOJ are located in budgets years from April to April.

 

The overall problem to USD/JPY is its associated averages lack uniformity and certain averages are misplaced such as 109.16.

81 day average = 110.93

XXX = 110.29 = Special average

337 day = 109.16

595 = 113.29

850 = 112.92

1105 = 110.08

USD/JPY current close 107.82

1279 = 5y = 107.10

1360 = 105.42

1616 = 101.20

1875 = 98.85

2132 = 98.05

2643 = 99.61

2897 = 101.17

3153 = 102.24

3412 = 102.61

3669 = 103.26

3924 = 104.37

4178 = 105.67

4432 = 106.07

4689 =106.26

4787 = 106.50 = Jan 1, 1999

 

Brian Twomey