Currency Vs Economic Cycles

A full economic cycle, dating to the BOE as first central bank in 1694, is composed of 50 years, divided by 4 cycles of 12 1/2 years.
I call it the 4 quadrants. The 1st quadrant of 12/12 years represents prosperity and certain market Trends. Everyone makes money.
The 2nd quadrant represents corrections and / or market crashes. All crashes happen in 2nd quadrants.
The 3rd quadrant represents fairly range markets as corrections are over yet in preparation to 4th and most vital 4th quadrant.
Today’s markets and Economic cycles are in 4th quadrant, hit absolute perfect in 2008.
4th quadrants sees uncertain markets as today, uncertain economic experiments, govt debts never to repay and the 50 year period end.
Year 2019 represents 11th year to 12 1/2 and this period will end soon.
End means by tradition free float currencies are finished as a new market form will rule the day.
May mean currencies pegged to gold as happened many times in past market cycles, pegged to silver, Bretton woods 1% currency moves.
What;s certain is prosperity lies ahead, peace, no wars. Markets transition into 1st periods rather than crash based on past history.
Full Currency cycles are 9 year events. A full trend up or down, takes 9 years. Means 9 year up or down to include corrections.
That;s mini cycles of 4 at 2.25 years. But 9 and 12 1/2 economic cycle deviate by 3 1/2 years.
                 Brian Twomey

GBP/CHF and GBP/USD Historic Lows

GBPCHF only monthly close in 66 year history dating to January 1953 is 1.2180.
Currently trades below. Below 1.2180, a price doesn’t exist.
GBPUSD Last Monthly close at 1.2200 then 1.1853 was seen at the time of  the Plaza Accords in 1985 when G5 central banks engineered USD Higher.
1.2200 = Oct 1984, then 1.1853 December 1984. Below 1.1853 then 1.1307 January 1985. Lowest of lows during Plaza Accords was 1.09.
GBPUSD‘s straight down slide began at 1.3300’s in March.
When does Carney and the BOE intervene.
Against lowest of low BOE interest rates on record, hard to argue GBP can be lifted by Interest rates alone.
Just to normalize, GBPUSD must trade to minimum 1.2900’s, or 700 pips to offer how severe are current lows.
GBPCHF to normalize must trade to minimum 1.2800’s easily, that’s also 700 pips
    Brian Twomey

GBP/EUR Historic 66 Year Lows

GBPEUR began its trading life January 1953 at 2.6564 and today after a straight 66 year downtrend closed at 1.0970.
What remains in monthly averages is 1.0975 August 2017, 1.0896 January 2009 and 1.0877 March 2009.
The corollary to 1.0877 is EURGBP 0.9193, and 1.0896 = EURGBP 0.9177 and 1.0975 = EURGBP 0.9111.
EURGBP confirms the message to GBPEUR as EURGBP cannot trade long.
Vital to Brexit and economics is 50% of all trade passes between the UK and Europe.
GBPEUR to move higher must break 1.1244 to target easily 1.1352 and remains deeply oversold not only from 1.1244 but from every MA from 5 to 253 days and its 10 year average at 1.1977.
EURGBP sits deeply overbought from its break point at 0.8895 and overbought from its 10 year average at 0.8382.
EURGBP must trade only from the short side. Identified 66 year lowest of lows in GBPUSD, GBPCHF and GBPEUR yet the lows trade in extraordinary times under exceptional circumstance
                  Brian Twomey

DXY and Treasury Intervention

Last time US Treasury intervened in FX markets was March 2011, bought 1 billion JPY, sold usd.

Then Sept 2000 , bought 1.5 billion EUR.

 

Total 2 FX interventions since 1999, based on treasury Quarterly reports.

 

Speculation to Intervene on DXY is ridiculous.

intervention requires movements, non seen.

treasury doesn’t intervene on DXY as major reserve currency.

RBNZ last FX Intervention was 2013, 500 million to adjust NZD. Intervention policy = TWI deviation, Reserves and economic / trade threat.

RBA last fx intervention was crash 2008, Intervened 9 times Oct -Nov then Oct 2007 and Sept 2001.

RBA always announces intervention at 3rd of every month. Always Transacts in AUD.

SNB Threats threats, hardly intervenes. Last major FX Intervention was 2009 to allow EURCHF 1.2009 floor to fall.

BOE not yet sure here. Stay tuned. Basis to intervention is FX Reserves and Gold holdings. All decreased severely since January. Most holdings in premiere JPY, USD and EUR dropped precipitously. Great argument for intervention.

Much intervention in Money markets. Intervention is costly, never clear to results based on academic papers. New intervention is adjust daily and headline interest rates, less costly, guaranteed results. More to follow,

GBP/JPY 66 Years

GBP/JPY 66 year lows for GBPJPY located at 119.30 at january 2012.
Post 2008 market crash range from lows 119.30 -130.00’s and many averages in between.
Precedent exists for lower easily however GBPCHF and GBPEUR trade at or below first ever recorded prices in 66 years.
And GBPUSD next average from 1984 is located at 1.1853.
Why GBPJPY approaches historic lows is because GBPUSD and GBPJPY are the same currency pair, always Correlates together extremely high and trades together as solid brothers, a marriage since the 1930’s under the 1930’s gold standard.
And since the BOJ pegged USDJPY to GBPJPY and Gold during the 1930’s.
Yet another  failed BOJ experiment as is their 100 year standard practice.
GBPJPY major break Point for higher is located at fast falling line at 137.14. Above Targets its longer term target at 147.00’s.
From current prices, 140.00’s can trade easily.
To technical analysis, as all GBP pairs drop, ranges expand, quite extraordinary circumstances.
Normally seen is range contraction. Means one spark and GBP Pairs are susceptible to 2 and 300 pip moves effortlessly
       Brian Twomey