USD/NOK and CAD: Levels, Ranges, Targets

USD/NOK since March 14th represents the 15th currency pair posted and 16th to include the no trade, 300 pip GBP/CHF range. All posted pairs performed as written but all posted pairs contain long range forecasts and may last for weeks or longer. EUR/AUD and EUR/GBP for example were posted March 27 and March 28 when EUR/AUD shorts entered at 1.6191 and EUR/GBP from 0.8797. EUR/AUD achieved new lows again overnight at 1.5895 and runs 296 pip profit while EUR/GBP runs +78 pips at 0.8719 lows. USD/CNY achieved new highs at 6.3100’s from 6.2874. AUD/NZD maintains laggard status as written and is just fine.

USD/CAD and CAD/JPY were first March 14th from USD/CAD short at 1.3140’s and CAD/JPY long from 80.58. The target for CAD/JPY as written was 84.00’s and CAD/JPY is close to its vital break point at today’s 84.53. A break then higher goes CAD/JPY to 86.00’s. Most vital is USD/CAD at today’s break point at 1.2762 then comes 1.2660 which means CAD/JPY at 85.00’s. After 3 weeks, both pairs must refactor and repost for exact levels and break points.

USD/NOK current 7.8482 contains topside problems as its price is high and overbought. Best aspect to 7.8482 is this price lies just under the next most vital break point at 7.8542. A break above 7.8542 places USD/NOK into a larger range as well as far more overbought status from 7.8542, to 7.9076 and 7.9358.

USD/NOK shorts must travel to at least 7.7724 and far lower overtime. Far lower over time means USD/NOK contains easy potential to challenge its 5 year average at 7.4955 upon a break of 7.7489. Current NOK trades above its 5, 10 and 14 year averages.

Further overbought means extreme caution at 8.0011 and 8.2927 yet current overbought points won’t be seen because NOK can’t handle nor won’t hold those levels. USD/NOK is a wide wide range currency pair.

Context to 8.0011 and 8.2927 is next break points and top of the multi year range are located at 8.1973, 8.2018 and 8.2867. USD/NOK contains one direction and its lower as longs are impossible.

First break points below are located at 7.8377 then clear sailing to target at 7.7724. Why target at 7.7724 is because USD/NOK over next days will sustain deep trouble holding 7.6907 and 7.6498 and 7.7489 is a huge break point. To see 7.7600’s will take time.

Next posts GBP/AUD although so far no enthusiasm for this pair. USD/MXN and CAD/MXN for possible NAFTA trades. AUD and NZD/JPY and CHF/JPY completes G10 JPY crosses. My currency pair arsenal contains 476 currency pairs so much more to go.

 

Brian Twomey

 

EUR/USD and G10: levels, Ranges, Targets

USD/CNY from Monday’s 6.2874 offered a gift to drop to 6.2691 and now trades 2 days later at 6.3056. Miles of upward distance remains as well as the continued buy dip strategy. USD/CNY is a terrific currency pair but as volatile as BRL because both pairs were built for distance. USD/HKD remains and lives overall in tiny ranges. From Monday USD/HKD waits for its impending dive. No interest and wasted effort in KRW.

EUR/AUD achieved new lows at 1.5919 from 1.6100’s. EUR/AUD above 1.5700’s will remain the long time gift and continued short strategy. Current price 1.6055 and short is the way. EUR/AUD is a reliable currency pair to hit targets as well because AUD , NZD and EUR are faithful as target trades.

EUR/GBP from 0.8797 also achieved new lows at 0.8719. EUR/GBP as well contains more downside. EUR/GBP remains a miserable currency pair because its mis positioned and no reason exists to trade this pair other than for professional purposes.
GBP/CHF as mentioned achieved 1.3500’s and dropped. GBP/CHF now trades 1.3513, 1.3500 to 1.3257. Nothing special here in GBP/CHF.

EUR/USD as mentioned required another downside before higher it goes. Held this week was 1.2323, 1.2360 and 1.2385. EUR/USD hit the gap at 1.2334. As mentioned again, watch the Gaps. I saw Gaps coming long ago and Gaps are now perfectly covered. Do or Die break point is here at 1.2228. Far lower upon a break. Watch 1.2236 today to challenge 1.2228. EUR/USD possible base as was seen in AUD requires further inspection.

USD/JPY. Had to trade to 106.61, it traded to 106.68. Bottom 105.16 held twice in the 105.60;s. Today’s downside break point now 105.89 and topside at 106.51 and big break point to see 108.00’s remains now 107.82.

USD/CAD break points below 1.2766 then comes 1.2660 Vs topside at 1.3092. Range 1.2766 vs 1.3092. Nothing special in CAD yet.

Remember EUR/NZD, it broke reported 1.6924 and 1.6893 from topside at 1.7088. Watch target at 1.6772 and above break points now 1.6893 and 1.6916.

NZD/USD Break Point and higher or lower line now 0.7230.

AUD/USD base was correct and AUD went higher to achieve so far 0.7715. Only points left for AUD/USD downside is 0.7688 and 0.7577. Upside break to see 0.7828 is located at falling 0.7772. I remain committed to 0.7828 and long any drop strategies.

AUD/NZD first achieved 1.0650’s from 1.0600 then achieved lows at 1.0534. No question to buy drop strategy and 1.0700’s then reconsideration to bother with AUD/NZD.

GBP/USD big break for lower now 1.3879 and 1.3842. April 23rd becomes final to BOE money market changes after a 2 year study to change money market structures. Say hello to the new AUD as the BOE will take part of the Great in the Great British Pound. The GBP character remains but the BOE chipped away at the edges to eliminate volatility. Overbought begins at 1.4181.

EUR/JPY first break point is located at the 5 year average at 130.78 then 14 year at 131.54 followed by 131.80. At 131.80 is required to travel higher but remember the top at 133.00’s. Rough road above for EUR/JPY.

GBP/JPY doe or die at 149.59.

AUD/CHF must break from current 0.7366 is located at 0.7422 then 0.7475.

NOK, SEK and many more pairs at 100 pips or better will post. Many exist. Above is just the warm up.

 

Brian Twomey

 

USD/KRW and Intervention: Levels, Ranges, Targets

What South Korea’s central bank head Lee Ju Yeol views in the intervention issue is USD/KRW is far to high and must drop therefore KRW rises. Yet Lee overall spoke intervention before in January and February against statements to only intervene if exchanges rates fell outside normal market activity.

While South Korea’s headline interest rate is currently 1.50%, it traded in February from 1.49% to 1.54% and the average deposit rate jumped to 1.80% in January and February. Why February is because the BOK releases interest rates at month end. 3 month Kibor however remains stable over the past 7 months at exactly 1.65% and contains no effect to the recent rise in USD’s Libor -OIS rate.

In 3 month USD Libor in March was 2.31, 2.02 in February and 1.78 in January V the BOK at 1.65. The 3 month Kibor rate tracks current 3 month CD’s, now at 1.65 and stable over the past 8 months. The 10 year KRW bond yield in March was 2.74%, down from 2.86% in February and 2.71 in January. Overall, no alarming indications to an immediate intervention and Lee’s statements may serve strictly as a warning.

While South Korea and Japan import Steel and Aluminum to the United States, the main exports are autos as $21 billion in Korea auto imports were recorded for the full year in 2016 and this figure is rising. Total trade in 2016 was $144 billion as the US exported $63 billion to South Korea’s $80 billion imports and a $17 billion deficit.

Korea is the US 6th largest supplier of goods and a vital market to Korea overall as the 2017 deficit in goods reached $25 billion as far more imports than exports are shipped to the United States. Its the Good side of the equation as cause for Trade concerns overall.

Korea maintains a Tree Trade Agreement with the United States since 2007, renewed in 2012 and the assumption is Korea will maintain Free Trade status in the yet to be signed new agreement.

Second aspect to intervention is an explosion is coming to the USD/HKD V USD/CNY relationship and more Correlation work is needed to assess what this means for KRW from a trading angle. The BOK sees this scenario overtime as they calculate their exchange rates from long term perspectives.

The overall assumption for all Asia currencies against Trump’s Steel and Aluminum Tariffs is to devalue the currencies. The assumption however is ongoing and yet to materialize but intervention may be the first of more to come by Asia’s central banks.
The BOK and Lee are watching USD/KRW 1073.59, 1078.88, 1095.64 then the 14 year average at 1098.07. Most vital overall are 1078.88 and 1098.07 as breaks will take USD/KRW higher to 1111.00’s over time. The problem with higher USD/KRW is the current 1058.07 price is far to high and must travel lower yet at 1058.07 is off the charts and must rise.

Technically, USD/KRW is literally in a nightmare and complete dilemma position overall. Nightmare is hardly a technical word but USD/KRW is struggling against itself and its the same scenario reported in USD/JPY. As to direction its unsure of itself. Its not a pair to trade currently.

Further and most vital Asia pairs to watch, followed by break points as reported currency pairs below are most important to not only trade but the CNY V HKD relationship.

CNY/JPY , 16.9010 and 17.0576. 5 year average = 17.1668. Current price = 16.8745

CNY/KRW — 169.2337 and 167.9023 Vs 5 year average = 173.9914. Current price = 167.97

 

Brian Twomey

GBP/CHF: Levels, Ranges, Targets

The purpose to post GBP/CHF is because it was noted on the retail analysts radar. As suspected and I should’ve known better, no trade exists. But the right church, wrong pew revelation answers to what degree and how dangerous are these types. Further pairs on the analyst radar to not view are CAD/CHF and NZD/CAD. The CAD/CHF trade is easy as we know USD/CAD and CAD/JPY and the best of both trades were done weeks ago. What is CAD/CHF, its CAD/JPY.

The shame to GBP/CHF is the absolute best of this trade was seen March 2nd at the 1.2800 lows and the further gains were derived March 13 from breaks at 1.3199 and 1.3228. This trade was a 400 to 500 pip gain in 2 weeks. But consider EUR/AUD 200 + pips in less than 46 hours, same for EUR/GBP + 60 and USD/CAD as well as CAD/JPY. Obviously this exercise is over.
Now GBP/CHF is stuck between 1.3228 and 1.3500’s and its untouchable. Untouchable because the GBP/CHF trade is done and plenty of 100 + pip easy trades exist so never to touch the EUR/USD or USD/JPY type pairs playing around at break points.

The 1.3500’s to this trade exists at 1.3513 and 1.3582 Vs below at 1.3228. Below 1.3228 then 1.3199 and 1.3081. Consideration to a quick day trade is short to 1.3377 and below.
Brian Twomey

USD/CNY Vs USD/HKD: Levels, Ranges, Targets

USD/CNY trade history as a result of the 2005 internationalization of the Yuan began July 2005 at 8.0351 then dropped over 1200 pips 3 years later to 6.7922 in July 2008. From July 2008 to May 2010, USD/CNY traded in dormant stages inside a 795 pip range from 6.8895 to 6.8090. USD/CNY’s 789 pip downtrend resumed from June 2010 to June 2014 from 6.8305 to a 9 year bottom at 6.0406. An uptrend began from 6.0406 to June 2017 highs at 6.9622. USD/CNY trades at current roughly 6.2874.

If the past is prologue as in the EUR/USD 9 year bottom at 103.00’s and GBP/USD’s 9 year bottom at 1.1900’s then USD/CNY currently embarks on a multi year uptrend and possibly a multi year correction from 8.0351.

USD/CNY since 2005 and in 144 traded months, 99 down months were seen as opposed to 45 up months.

USD/HKD from July 2005 at 7.7730 bolted 568 pips to 7.8298 in July 2007. USD/HKD from current 7.8489 trades at 29 year highs not seen since January 1989. As a result of the Plaza and Louvre Accords in the 1980’s, USD/HKD traded briefly from 1984 to 1989 in the 8.0000’s. Overall, USD/HKD’s larger price history began from 5.71 in January 1960 and trades at the top of a 58 year uptrend.

USD/HKD is far from richter scale overbought since 1999 and beyond but current price is unsustainably overbought and desperately needs a correction. Noise levels on certain days achieve maximum statistical capacity seen historically only in current EUR/DKK. USD/HKD risks not just a correction but an explosive downside move. Long USD/HKD is literally impossible in favor of a short only strategy.

As USD/HKD trades miles above its overbought 5, 10 and 14 year averages at 7.7673, 7.7676 and 7.7727, the first target lower is located at 7.8208 followed by 7.7982, 7.7923 and 7.7889. USD/HKD should and will trade to its current comfort zone at 7.7923. Perspective to overbought is USD/HKD must correct at least 600 pips and longer term, no reason why a challenge exists to the 14 year average at 7.7727.

USD/CNY from 6.2874 must trade 997 pips higher to easily 6.3268, 6.3779 and 6.3871. USD/CNY trades miles below its 5, 10 and 14 averages at 6.4062, 6.5127 and 6.8172. USD/CNY is severely oversold particularly from its current longer term break points above at 6.4840 and 6.5213. The 10 year average at 6.5127 is well protected. Despite CNY / Yuan internationalization since 2005, the 14 year averages was obtained from the ECB.

Historically, USD/CNY was fixed and maintained a 1960 price at 2.4618 until it traded at 2.2450 at the January 1972 free float. Since 1972, CNY dropped to 1.84 lows then embarked on an uptrend until its was again fixed at 8.2700 from January 1997 to July 2005 until it again free floated at 8.2165. The 58 year mid point is located at roughly 5.3391 to 5.3659.

AS USD/HKD traveled higher, USD/CNY traded lower and now both pairs trade far outside respectable averages and range boundaries and both must correct as current price levels are unsustainable.

 

Brian Twomey