G10 and Currency Spreads: Levels, Ranges, Targets


GBP/USD on my blog posted Saturday, GBP/USD trades between the 81 day average and 596 day from 1.2925 to 1.3792. GBP/JPY trades between 81 day at 143.39 and 595 day at 156.76. GBP/CHF was also highlighted for interested as I wrote GBP/CHF was set for a big move and couldn’t maintain its current position. Of all GBP currency pairs, GBP/CHF provided the signal to a big move and it led the way.

GBP/USD big line today is located at 1.3579 and below at 1.3496 while GBP/JPY levels are located at 151.39 and 150.60. Meanwhile and most important is GBP is now light years overbought and not supported by current prices, nor interest rates nor the split BOE board, nor Carney and further fantasies. Not an ounce of evidence in money markets says raise and this is day 3 of GBP’s rise. Stated many times, GBP interest rates are dangerously low and GBP prices are extremely low. Carney came to the BOE as a star as he left the BOC and Canada in good shape. Years later, Carney languished, adopted stimulus, saw GBP and interest rates dead on the floor. No excuse exists to this behavior from any nation.

CZK and ZAR currency pair spreads on news announcements skyrocket to 5000 pips and 1000 to 2000 for ZAR. The spreads exceed the actual daily movements and on many, many days. The 5000 pip spreads justify possibly because from today’s USD/CZK break points from 21.9931 to 21.8026 exists 1900 pips. From an overall perspective, 2178 pips exists from bottom to highest point break.

Why wide movements is because nations such as SEK, South Africa TRY, Latvia, Lithuania, Estonia, Iceland, Russia, are not interest rate nations but are Repo Rate nations. Repo Rate nations are vastly different to interest rate nations but Repo rates are designed for wide currency pair movements. Mexico isn’t a Repo Rate nation but its system is similar and designed for wide movements.

Why the insatiable interest in EUR. EUR is a pure currency pair, not a hybrid, allowed to move and trend. Many, many traders are EUR/USD only traders. Its a smart move. Trade EUR/USD is to trade the 2 top currencies of the world. Traders are actually trading the world to borrow a cliche. Here’s the question. Name another currency pair with the same spreads as EUR/USD that is not affected by EUR/USD moves. The pairs exist but only a few.

GBP shot 400 pips higher but no other pair followed. Welcome to the Libor elimination effect and the single nation control to currency prices. In the old days, all currency pairs would’ve followed and volatility would’ve skyrocketed. Fortunes were made in the old days, today however be selective on currency pair choices. How is it, USD/JPY went higher but USD/CAD went lower. Currency prices uniformity was taken from the market.

Break points below, and to restate, my trades, break points, targets were fully inspected and passed by the best out there.

EUR/USD Break 1.1949, targets 1.1968. The brick wall today is located at 1.1977 and 1.1972. Below 1.1949 targets 1.1876.

USD/JPY. Today’s brick wall at 111.19 and 111.15 broke to 111.32. This is located from 110.73 and 111.65.

EUR/JPY must come back to 132.77, then 132.55, 132.41 and 132.34

USD/CAD 1.2119 vs 1.2150 and above 1.2182.

Brian Twomey