EUR/USD, Sonia, G10: Levels, Ranges, Targets

1 month after the BOE’s formal launch to its interest rate redesign, the system operates as normal however the great 1997 Sonia invention contains slight difference in meaning, understanding and application. It holds its power but under a slightly different context. Only those, especially bankers, with understanding to the prior interest rate system contains full comprehension to the new system.

Advantage goes to banks and derivative traders as they long prepared for this day but note banks and interest rate trader concern is an interest rate trade rather than a GBP trade. Both are miles apart to meaning, understanding and application. It was an imperative to understand the old system and relationship to GBP in order to apply GBP to the new standards.
What changed overall was time in relation to price as price lacks the same speed as it once held. Retail traders however still remain subjected to the scrap pips leftover from the pro traders against their perfect price knowledge.

Further to questionable changes and BOE interest rate adjustment insight is what is the interest rate Correlation to the money supply. As GBP and the BOE are far more closer to AUD and RBA than EUR, the assumption is Correlations are out of sync as it is for AUD.

Daily trades remain absolutely perfect as we prepared along with the bankers for GBP changes and applied the exact same methodologies.

EUR/USD. Recall the current 1.1550’s was the result of the 1.2358 break and EUR now traveled 800 pips. At 1.2358 is now 1.2312 and EUR is deeply oversold from this point. Today’s further break point to challenge again 1.2300’s is located at 1.1922 and as well is deeply oversold.

Oversold in context means the only 2 points remaining for EUR downside is located at 1.1369 and 1.1267. No such point exist for a 1.10 EUR presently and 1.10 won’t come into view if ever for many months. Again, we’re experiencing Banks turned retail traders against impossible to achieve forecasts and they cover the gambit, AUD 0.7100, EUR/GBP 0.9200, 0.9300, USD/JPY 117 in 3 months while 1 month already passed. Again, smart and skilled traders don’t write and why should they bother against today’s clutter and this includes me. Post to post from today’s writers looks like the same old tired thing,

Recall the USD/CAD trade from March at 1.3100’s and drop to 1.2500’s. USD/CAD today is located again 3 months later at its highs. Today’s short USD/CAD is a repeat to March as the highs are here again. The difference today is a 200 ish pip trade against March 600. USD/CAD’s break point today is 1.2819 and CAD remains severely overbought. Any price above 1.3002 is a sell only trade as USD/CAD’s overall strategy is short.

EUR/GBP also remains the gift that keeps on giving as highs are sold inside an overall short only strategy.

USD/JPY achieved 108.62 and traded to 108.11. USD/JPY’s break point is today’s 109.36. Above 109.47 is a problem for USD/JPY as its proper place is below 108.62.

EUR/JPY what remains to the downside is 123.00’s and 122.00’s and against a 10 year average at 125.24 while upsides exist at 130 and 131.00’s.

NZD/CAD held reported 0.8965 and bounced from 0.8971 to break 0.9006 and traded to 0.9026. NZD/CAD traded this week 55 pips. NZD/CAD at 0.9009 is an outlier number as it now trades in Skitzo land from 0.9009 to 0.9129 and 0.9141. NZD/CAD’s current position is quite dangerous and its not a currency pair to rush to trade until it leaves it skitzo qualities.

 

 

Brian Twomey