EUR/USD and G10: Levels, Ranges, Targets

 

 

The common theme in currency markets is volatility into the 4th quarter as it existed in the 2nd quarter is here and it demonstrates by the amount of trades and pips posted in the unrecognized March/ April period. 4th quarter volaitlity and number of great trades will exist as it did in quarter 2 and this volatility will also last for the entire quarter. Currency pair trade choices are always most vital as certain currency pair prices will out perfom others and because certain currency pair prices lead and lag each other.

Currency pair choices in the major pairs are 28 and this means 378 combinations of 2 or 378 currency pair selections to trade. The focus is always on the same old tired non mover pairs. EUR/USD is always a focus but this miserable currency pair lives in ranges for most of its trading life and rarely leaves it boundaries. When EUR/USD traded to 1.1800’s was the only time all year when EUR/USD contained a deviation worth trading as the deviation gap lacked any choice except to close to only then see EUR/USD back inside its same tired dead ranges. Vital to know specific range points in range trades or problems exist. Range pairs, EUR/USD specific, is always over forecasted.

USD/JPY or miserable currency pair number 2 trades all year at 200 pip break points from 104, 106, 108, 110. Now USD/JPY trades from its lower break point at 111.88 to 112.48. Its an untouchable currency pair especially above 112.48 and remains in ranges for months.

Opportunity is presented by a dead USD/JPY as the pre·eminence signal pair to JPY cross pairs is found in CHF/JPY. Know CHF/JPY then is known GBP/JPY, EUR/JPY and anti’s AUD/JPY, CAD/JPY and NZD/JPY. Know CHF/JPY then is known 6 trades to include CHF/JPY. Know JPY cross pairs to its major counterparts as attachments then is known double trades in EUR/USD and EUR/JPY, GBP/USD and GBP/JPY, AUD/USD and AUD/JPY, USD/CAD and CAD/JPY, USD/CHF and CHF/JPY. Total 5 more trades are added from 6. Know currency pair relationships then is known currency pairs formed as economic documents.

GBP/USD on paper is the big mover currency pair but never lives to its billing. At 1.3900 exist the overall target as mentioned many times since March/ April. GP/USD will trade to 1.3900.

AUD/USD and NZD/USD are off kilter by at least 300 to 400 pips and this means both should trade 300 to 400 pips higher. Off kilter means EUR/AUD and EUR/NZD are running to wild volatility.

EUR/AUD and EUR/NZD are good examples to today’s volatility. EUR/AUD shorts from 1.6300 traded to 1.5900’s against a 1.5600 target. Took 10 days for EUR/AUD to drop to 1.5900’s and 3 days to trade back from 1.5900’s to 1.6300. This trade is the exact same trade taken in March / April from short 1.6400 to 1.5600 target. Trade took almost 7 weeks to complete the 1.5600 target in March / April then 4 months to trade back to 1.6300’s.

EUR/NZD short from 1.7800 to target 1.7200’s traded days later to upper 1.7400’s then bounced to 1.7800’s days later.

EUR/AUD. Break Point 1.6026. Driver to EUR/AUD is AUD/USD. Lower AUD/USD then higher EUR/AUD, higher AUD/USD then lower EUR/AUD. More specifically EUR/AUD is currently overbought, AUD/EUR severely oversold. Both AUD/USD and EUR/AUD are severely off range by easily 300 to 400 pips. This means AUD/USD must trade to 0.7300 to 0.7400 and EUR/AUD to 1.6026 break then 1.5835 and longer term 1.5600’s.

Strategy. Short any market price from the close at 1.6337 to target 1.6176, 1.6085, break at 1.6026 then 1.5835 and longer term 1.5611. Short only strategy means short tops.

Few traders are assisted with daily and long term trades and these longer term trades are becoming very popular as we’re trading 8 and 10 pairs at a clip. Contact if interested.

Break Points.

EUR/USD. 1.1680.

CHF/JPY 114.30.

GBP/JPY. 147.19.

GBP/USD 1.3150.

AUD/USD 0.7290.

EUR/CAD 1.5132.

USD/CAD 1.2956. See 1.2600 target written ad nauseam since March / April.

GBP/CHF 1.2881.

EUR/NZD 1.7463.

 

Brian Twomey

 

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