EUR/USD, G10, Currency Pair Selection: Levels, Ranges, Targets

Currency pair selection in relation to a 50 and 75 range factor means overall currency pair choices are incredibly slim. By process of elimination and to account for overall ranges and trades to move 100 and 150 pips, this week picks are GBP/CAD, EUR/NZD, EUR/CAD, EUR/AUD and against a deep inspection to EUR/USD, GBP/USD and AUD/USD as well as AUD/JPY longs.

EUR/AUD overall remained a constant pair since March 14th. EUR/CAD despite a miserable currency pair and choice will remain a constant pair only because of overbought status otherwise this pair loses any consideration from now to doomsday.

USD/CAD shorts as well is considered this week but only because of skyrocket overbought status. Recall March 14 and the 600 pip drop from 1.3100’s. Written was USD/CAD was dead and eliminated from long term consideration as the range was 300 pips. Now 6 weeks later, USD/CAD remains dead inside a range of 300 pips from 1.2722 to 1.2926 and top of the channel at 1.3049.

Nothing special in USD/CAD yet USD/CAD as a choice always moves far better than USD/JPY and USD/CHF because of CAD wide ranges, good movements, target responsive and CAD triggers contain miles of difference from JPY and CHF to allow its movements.

By process of overall elimination, 28 pairs are available to trade in the G10 space but many pairs are slow movers and eliminated from consideration. USD/CHF and CHF pairs are rarely regarded and this strikes CAD/CHF, EUR/CHF, AUD/CHF, NZD/CHF and GBP/CHF. Only regard to CHF pairs is trade as complements but rarely trades for long term consideration.

EUR/GBP, AUD/NZD and AUD/CAD as well eliminates although we caught a 200 ish pip trade in EUR/GBP and minor trade in AUD/NZD. Both EUR/GBP and AUD/NZD contains deep internal problems while AUD/CAD was designed as a non mover.

In JPY cross pairs, EUR/JPY is eliminated as the range is 128 to 133.11 tops but below 133.11 must break 132.74 and 132.44 then comes the 14 year average at 131.56 and 5 year at 130.85. AUD/JPY remains deeply oversold and trades at the lowest rung to its long term range. CHF/JPY and NZD/JPY in the current slow move environment lack any consideration.

GBP/JPY trades on a far different plane than its counterparts as movements are built into its price. Current 150.88 must break for higher in GBP/JPY.

EUR/NZD clearly beats GBP/NZD as GBP/NZD contains skitzy qualities by itself and against NZD/USD. GBP/NZD trades 300 pips from 1.9200’s to 1.9500’s and overall trades in a larger correction below 2.0698. The EUR/NZD trade is well established in movements and break points and may qualify as a continued trade next week.

GBP/CAD’s break point at 1.7900’s was clear and today it trades at 1.7500’s. GBP/CAD should also qualify as next weel’s trade.
EUR/AUD clearly beats GBP/AUD as EUR/AUD is well established in movements and break points while GBP/AUD was never designed to move. Consider weekend cocktail party information below from the glorious days of currency trading in the 1920’s and 1930’s.

AUD/GBP 3/31/1919 traded 0.3333 or GBP/AUD 3.0003. By 6/30/ 1931, AUD/GBP was 0.3846 or GBP/AUD 2.6001 and moved 4000 pips in 12 years or 300 pips per year. Today GBP/AUD trades 1.8204 and moved lower by 7700 pips since 1931 or 87 years.

To ensure cocktail party success, here’s AUD/USD, AUD/USD 1919 to June 6/30/1931, Ranged 2.4300, 2.2300, 2.2200. By June 1931, AUD/USD traded to 1.8000. Current 0.7500’s represents a 99 year downtrend, lowest in History.

To restate and end. Trades must contain 100 to 150 pip targets or no trade exists, many pairs fail qualification currently. Selection is key and only offered in a few currency pairs. A 300 pip range is quite dead if considered as 150 pips on 1 side to trade upon a move from significant break points.

Trades.

DXY recall 2 weeks ago the 5 year average at 91.45 and DXY now trades 92.05. Lends deep consideration to EUR/USD’s 5 year at 1.1949 and USD/JPY at 110.01. A 5 year average break offers clearer direction and more available pairs to trade yet a 5 year average doesn’t contain the period change power to a 10 year average break. Its just means established direction and wider ranges.

EUR/USD 1.1949 below but is contained today at 1.2029, 1.2013 and 1.1998. Break point above now 1.2188, drops 25 pips from 1.2213.

GBP/USD. Watch bottoms at 1.3695 and 1.3678 and break point now at 1.3886, drops 29 pips from 1.3715.

GBP/JPY contained below by 149.87 and 149.68.

USD/JPY break point now 108.68 and below contained by 109.02 and 108.89. Recall above 109.43 and 109.69.

AUD/USD break point 0.7702, belongs at 0.7649 and above 0.7702 then 0.7838. At 0.7100 is loacted at deepest extreme prices and I wouldn’t advise pushing the envelope.

NZD/USD must break above 0.7175. Contained to below at 0.7012, 0.7003 and 0.6994.

 

Brian Twomey