EUR/USD, Crosses, Forward Points: Levels, Ranges, Targets

Forward Points, for the most part, are FX conventions employed since the free float because of the current first ever experiment to allow exchange rates to trade against interest rates rather than the 400 year tradition to trade FX against Gold.

The Forward Point was actually used in 1930’s FX trading but it was adjusted as a measure to trade FX against Gold. As interest rates became the trade order in Jan 1972, the Forward Point was transformed to fit modern day trading as an interest differential. Only a few papers just found so far however reference the Forward Point in 1930’s trading and methodology wasn’t yet reviewed. The assumption is the Forward Point was factored against 1930’s trade methods in Open Interest/ Volume studies and Gold/ Silver Ratios. A difference in purpose existed however.

In 1930’s trading, focus was strictly on exports as IBM and GE weren’t established in other nations. The Forward Point is vital today to factor Forward prices especially as major companies need and trade Forward exchange rates across multiple borders. From a simple Forward price calculation materialized the Non deliverable Forward to satisfy trade in Black Box currencies. North Korea for example is a Black Box currency as its currency trades under non conventional means. South American nation currencies are Black Box currencies.

EUR/USD’s last 1 year Forward price was 1.1806. Today’s 1 year Forward Price is 1.1991. Forward Points transformed to actual pips are trading in ranges at roughly 153 pips. The distance from 1.1991 to 1.1806 is 187 pips which means 1.1991 over coming days represents an important break point.

Since 2008, only 3 persons on the planet mentioned CAD/ZAR as a most vital currency, function and import to the current trading world. The appropriation was never granted.

EUR/USD break Points 1.2010, 1.1804 and 1.1741. Currently oversold from averages. Must break points higher are  located at 1.1867 and 1.1884, below comes 1.1824 and 1.1807.

EUR/CHF overbought currently, sits above vital break points at 1.1570 and 1.1555.

USD/JPY is again must move from its current position. Supports are found at 112.42 and 112.14. Higher must break 113.09 and 112.84 below.

EUR/CAD sits miles overbought and vital break is located at 1.5004 to see a deep dive.

EUR/AUD sits overbought against vital break points at 1.5330 and 1.5338.

 

Brian Twomey