EUR/USD V USD/JPY and G10: Levels, Ranges, Targets

Currency market common themes at 50 and 150 pip ranges experienced slight violations particularly in EUR pairs. Ranges were reported last week against the caveat to many currency pair prices approached and/ or traded at significant high/ low break points therefore subject to long rejection candles. EUR/USD, EUR/JPY and GBP/USD approached 1.1895, 1.3544 and 130.00’s then dropped while USD/CAD and USD/JPY rose from break points at 1.2950 and 109.29.

Among the 10 currency pairs posted last week EUR/USD, EUR/AUD and EUR/JPY were clear winners as each dropped 262 pips, 263 and 264 to violate the upper 150 range by roughy 100 pips. EUR/USD dropped from 1.1809 to 1.1547, EUR/AUD 1.5694 to 1.5431 and EUR/JPY 130.33 to 127.69.

USD/CAD was next to violate at 252 pips as CAD jumped from 1.2950 to 1.3202 followed by GBP/USD’s 237 pip drop from 1.3449 to 1.3212. GBP/JPY and USD/JPY each roamed 164 and 161 pips from 147.90 to 146.32 and 109.28 to 110.89.

AUD/USD and AUD/JPY each ranged 183 and 188 pips from 0.7622 to 0.7439 and 84.15 to 82.27. AUD/JPY since March and reported many times previously, held 84.00 to 82.00’s against slight violations at 81.00 and 85.00’s but always managed to retain its 82.00 to 84.00 space.

CAD/JPY held 149 pips from 85.20 to 83.71. Reported last week in CAD/JPY was the continued struggle to USD/CAD as this relationship contains serious problems. Note the perfection in EUR/USD V EUR/JPY and AUD/USD to AUD/JPY.

USD/CAD must travel miles lower and CAD/JPY higher in order for this relationship to rectify. The same problem relationship is seen in GBP/USD to GBP/JPY but GBP/JPY is clearly explained by an uncertain and clueless USD/JPY since its March rise from 105.00’s.

Into week 2 is again seen a USD correction lower and non USD as in EUR/USD and GBP higher. The clear winners higher this week are seen easily in EUR and GBP and USD/CAD lower while USD/JPY will remain the slow / dead mover.

EUR/USD higher to again target 1.1812 must break 1.1660, 1.1669 then 1.1718 and 1.1724. Caution is warranted at 1.1724 as much daylight exists from 1.1724 to 1.1803 then the 1.1812 target. Above 1.1724, EUR/USD could easily see a 1.1724 to 1.1784 range. EUR/USD break point to target 1.1946, 1.1952 and longer term 1.2038 and 1.2085 is located at 1.1881.

EUR/USD below break is located at 1.1383 and is under no threat this week to travel lower. EUR this week retains a long only strategy.

GBP/USD deeply oversold like its EUR/USD counterpart, targets easily this week 1.3349 then 1.3449 ahead of its vital break point at 1.3518 to target 1.3600’s and 1.3800’s. GBP drops fails to maintain its relationship with current averages therefore GBP’s overall ability to skyrocket and travel significantly higher over time remains a great potential. GBP’s best comfort zone is located from 1.3518 to 1.3800’s and this area coincides to EUR/USD 1.1800 to 1.2000’s.

AUD/USD break point is located at 0.7623 to travel higher to 0.7700’s. This week’s targets are located at 0.7555, 0.7573 and 0.7589. At 0.7589 must break to target 0.7623 and 0.7700’s. AUD as well is deeply oversold short and long term as AUD contains every ability to target 0.7800’s over time.

GBP/CAD is well supported at 1.7438 and 1.7429 and target this week is located at 1.7699 upon breaks at 1.7568 and 1.7597.

USD/CADis not only overbought but a clear favorite for shorts to target longer term again 1.2776 on breaks at 1.2894, 1.2883 and 1.2865. First break points below are located at 1.3010, 1.3001, 1.2981 and 1.2930. For the week acceptable targets are located at 1.2981 and 1.2930. Recall USD/CAD last week bounced from current lower 1.2900 supports.

USD/JPY Lower targets 109.01 and 108.88 on breaks at 109.76, 109.64. First breaks lower are located at 110.50, 110.27, 110.19 then on to 109.64 and lower. Above 110.50 targets 111.87 and 111.96 and far more closer to USD/JPY historic range tops at 113.00’s. As stated previously, USD/JPY contains great potential to travel significantly lower to 107.00’s on a break of 109.64 and 108.88.

 

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Brian Twomey

 

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