EUR/USD Peaks and Turns, 2013

 

Original Published 2013

An old EUR/USD 2013 study, never published but slated for FX Trader Magazine. They requested minor changes, I refused so never published. Then sent to Stocks and Commodities Magazine only to get lost in the shuffle.

To forecast tops and bottoms, below is the methodology and it was employed to accurately call the EUR/USD top at 1.3900’s. The peaks and turns however must update. Note also our EUR/USD is traditionally a highly neutral currency pair and rarely falls outside of its neutrality. Today it broke its tradition, a tradition that held dating to its forerunner DEM/USD. Once the Euro zone finds it balance again, hopefully soon, the EUR will retain its neutral 95 year tradition.

 

Because the current EUR/USD price was confounding due because it retraced more than 50% of its move from last year’s 1.3712 top to the 1.2750 bottom, I decided to look at daily, weekly and historic significant peaks to predict a possible top. My early assumption was 1.3350 in the July /August period may very well have been the current top at time of this writing. Further, if the EUR/USD is measured in terms of peaks only from a daily, weekly and historic perspective, the EUR/USD as a currency pair falls into the exact neutral category. Its typical Euro in classic fashion as it loves its neutral zone comfort level. It rises and falls only to end in undecided zones. We begin with the daily charts.

Since January 2013 to July /August, daily down peaks record as 6 days, 1 peak, 12 days, 1 peak, 38 days, 1 peak, 15 days, 1 peak. 71 days total was recorded with 4 significant peaks. Down days turned every 17.75 days on average.

Daily up days since January 2013 to July /August. I recorded: 5 days, 1 peak, 22 days, 1 peak, 17 days, 1 peak, 14 days, 1 peak, 16 days, 1 peak. A total of 74 days saw 5 significant peaks with an average turn every 14.8 days.

If daily up days to down days are viewed, the EUR/USD trend/peaks turn every 16.1 days total.

Figure 1 is a daily EUR/USD chart.

Weekly EUR/USD. Since January 2013 to July / August, Up weeks I recorded: 4 weeks, 1 peak, 5 weeks, 1 peak, 5 weeks, 1 peak, 4 weeks, 1 peak. Notice the 5 / 4 relatiuonship. A significant peak occurred every 4.5 weeks on average.

Weekly Down days. Since January 2013 to July / August, down weeks I recorded: 8 weeks, 1 peak, 2 weeks, 1 peak, 3 weeks, 1 peak. A significant down peak occurred every 4.33 weeks on average.

Weekly up days vs down days. A significant weekly peak occurred every 4.4 weeks on average and fairly consistent with the 16.1 daily peak turn.

Figure 2 is a weekly EUR/USD.

From the Oct 2000 bottom at 0.8206 to present July / August period.

Monthly up months with a signfiicant peak I recorded, 3 months, 1 peak, 3 months, 1 peak, 16 months, 1 peak, 5 months, 1 peak, 8 months, 1 peak, 3 months, 1 peak, 29 months, 1 peak, 13 months, 1 peak, 12 months, 1 peak, 2 months, 1 peak, 6 months, 1 peak.

Total up months with a significant peak equates to 100 up months with 11 significant peaks.

Monthly down months I recorded: 5 months, 1 peak, 4 months, 1 peak, 3 months, 1 peak, 3 months, 1 peak, 6 months, 1 peak, 3 months, 1 peak, 6 months, 1 peak, 7 months, 1 peak, 8 months, 1 peak, 5 months, 1 peak, 7 months, ?. Present month and possible next peak is ongoing.

Total up months: 100, 11 peaks. Total down months, 57, 11 peaks. Total up months peak on average every 9.09 months vs total down months peak on average every 5.18 months.

Interesting aspect to the historic up months was the economic boom period between 2003 – 2006 where the EUR/USD I recorded 29 straight months before a significant peak occurred. It would appear this large increase before a significant peak occured to skew the averages can easily be argued because minor peaks occured along the way. Yet if we look in terms of significant peaks only, we find an exact 11 peak difference between up and down peaks and because we see the EUR/USD daily, weekly and historically as a highly neutral currency pair with fairly consistent up and down numbers throughout, I hold to my 29 month count.

The purpose why a longer term view in monthlies was not only to determine significant peaks but the EUR/USD’s neutrality became a fascinating issue along the way. Lastly, if the EUR/USD was viewed perfectly parallel to the daily and weekly January time frames, only one significant peak occurred and that was last year’s 1.3712 top.

Brian Twomey, Inside the Currency Market, btwomey.com

EUR, GBP, Yellen, JPY: Levels, Ranges, Targets

Posted today is concepts and new revelations to Realignment as it pertains to 2015 to 2017 but deeply focused on Jan 15, Feb / March 15 and September – November 2015. Realignment was always addressed by prior articles and 1 upper tier bank in broad concepts and this is a wrong view as mini Realignments occurr within a market period. Drastic monetary policy changes occurred within the focused months. Once October 2015 was over, markets traded back to normal and this normalcy survives today and it appears so far, more of the same will be seen in 2018. So far is a caveat until reported differently. Few takeaways.
USD/JPY is an incredibly minor currency pair. If USD/JPY wasn’t included in the US Exchange Stabilization Fund and the United Nations SDR program then it would be relegated to the category of the Iraqi Dinar, or Afghani AFN.

Because of the ESF and SDR, USD/JPY as well as EUR/JPY because of EUR/USD, deserves special attention. The main 3 pairs in all currency trading in decades past, present and future are EUR/USD, EUR/JPY and USD/JPY. Not even DXY deserves attention. Its another extremely minor currency.

Every Fed Monthly Statement mentions “The Dollar” went up, went down. Its not specifically mentioned as DXY. Fed investments including currencies span 1 year time frames from September to September. The Fed as investors lost in 2015 $28 billion in SDR’s and #29 billion on EUR and JPY trades. For context, the FED may never recover losses in EUR and JPY trades. Losses are enough to bankrupt every retail currency broker in the US.

Fed Minutes has got to be the most worthless read in the history of the world and month after month, year after year. The exact same words are written only rearranged every month, every year. Board member votes? Keynesians vote as 1 big block every month, every year. Minutes has got to be the most non market event in the history of markets.

Most vital read are Fed Statements because much is missed, analyzed nor ever reported . Queen Yellen was intent on Raising Fed Funds in January 2015 and it was clearly obvious from Statements. The only question was when. Forget the read to economic forecasts as they remain always wrong.

Queen Yellen’s press conferences are the most perfectly scripted events ever seen in the history of plays. She insults good intelligence by regurgitating dribble from past statements. She hasn’t offered an ounce of substance, new or actionable informatioin her entire tenure as falling Queen. Equally tragic are reporters. They ask questions that were already reported in Statements. Makes scripted Yellen look like a genius.

Queen Yellen is clearly a Keynesian, conservative Ideologue. She doesn’t believe nor likes markets because she lacks control. Yellen lacks ability to deviate from QE and Keynesian practices. Yellen could’ve raised Fed Funds in January 2015 when rates were on the floor but she couldn’t do it without backing from new Repo facilities as control. Took an entire year to raise. I expect the same in Powell as he voted 100% with the Keynesians.

GBP/USD. Overall break points, 1.3147 and 1.3108. Break points below to 1.3056 are 1.3115, 1.3089 and 1.3072. GBP currently trades at the low end of the range. Breaks higher must cross today 1.3115 and 1.3128 then 1.3158.

GBP/JPY. Overall break points today, 147.78 and 146.51. To see 149.09 then watch 148.46 and 148.27. Higher must break 148.77 then 149.09.

EUR/USD. Overall Break points, 1.1615 and 1.1793. Below must break 1.1632 then 1.1623 and 1.1609. Watch 1.1675 above.

USD/JPY. Overall break at 112.73 is close the next comes 111.43. Below break are 113.27, 113.14 and 112.99. Higher must break 113.58.

Brian Twomey