EUR/USD, Cross Pairs and the Matrix

The EURUSD and its cross pairs constitutes an extraordinarily complicated and profoundly deceptive exchange rate system as all factors to EUR/USD and cross pairs leads directly to its prediction of the most special pair: EUR/GBP.

Within EURO’s 7 currency pairs, 4 pairs trade above, EUR/NZD, EUR/AUD, EUR/CAD and EUR/JPY while 3 pairs trade below as follows: EUR/USD, EUR/GBP and EUR/CHF.

To factor EUR pairs on a curve then exchange rates as seen by broker platforms appear far, wide and meaningless. And for the most part, they are without doubt far, wide and meaningless.

Averages range from 1.2000’s to 1.3600’s. Many light years of difference exists between higher and lower exchange rates and its extraordinarily difficult to not only trade and understand but to accurately forecast.

One must ask why the design to such a complicated arrangement, is the system established for trader failure or my theory is the organizational composition slated to only sophisticated traders under complete exchange rate understanding. To understand is 1/2 the battle to winning.

Averages from the curve factored to reciprocals reveals various stages as EUR/GBP bottoms.

EUR/GBP lies at the center of focus for trading and forecast to all Euro exchange rates. EUR/GBP forecasts from EUR exchange rates but only from higher exchange rate numbers.

From exchange rates only, forecast currency pairs for EUR/GBP are as follows: EUR/AUD, EUR/CAD and EUR/NZD.

From exchange rates only, no forecasts are found when factored to EUR/JPY, EUR/USD and EUR/CHF. No such concept exists to forecast EUR/GBP from EUR/USD, EUR/CHF and EUR/JPY except to find far away and meaningless bottoms.

EUR/AUD, EUR/CAD and EUR/NZD forecasts a perfect top target and the same target for each pair while each pair also forecasts a bottom entry.

EUR/GBP Vs Uk and Europe Imports and Exports

The EU, taken as a whole is the UK’s largest trading partner. In 2018, UK exports to the EU were £291 billion (45% of all UK exports). UK imports from the EU were £357 billion (53% of all UK imports).
The share of UK exports accounted for by the EU has generally fallen over time from 55% in 2006 to 44% in 2016, though this increased slightly to 45% in 2018.
The share of UK imports accounted for by the EU fell from 58% in 2002 to 51% in 2010, though this has now been at 53% since 2014.
The UK had an overall trade deficit of -£66 billion with the EU in 2018. A surplus of £28 billion on trade in services was outweighed by a deficit of -£94 billion on trade in goods.(UK Parliament).

EUR/GBP as 0.8538 is as profoundly important as GBP/EUR 1.1712.

Reciprocal Euro Exchange Rates

Correct trade entries, targets and forecasts are derived from reciprocal exchange rates for all Euro pairs to include EUR/GBP, EUR/CHF and EUR/USD. EUR/GBP not only forecasts correctly but under certain EUR pairs is seen a GBP/EUR top. However steps are required to forecast and the necessary changes are the same for each EUR pair. The question is which pair is the trade focus and this answers which pairs to factor. From 7 currency pairs offers 21 combinations.

For example, EUR/USD and EUR/JPY predicts a EUR/GBP top and this top is verified by EUR/GBP and EUR/JPY. EUR/AUD and EUR/CAD predicts a EUR/NZD bottom and EUR/CAD top.

EUR/JPY on its own fails to forecast anything.

EURUSD, EUR/CAD and EUR/JPY forecast in certain weeks neutrality.

Triangulation Trades

A currency pair in a neutral position means the neutral pair fails to move while the 2 currency pairs associated to it provides movement. EUR/USD and EUR/CAD are the top 2 neutral currency pairs. EUR/CAD serves its purpose by its middle bound position while EUR/USD has been strangulated by the new ECB interest rate STR system. EUR/NZD and EUR/AUD are married at the hip.

The overall revelation is exchange rates forecast exchange rates as currency prices are tied together as glue inside a truly complicated and intertwined system. Understanding is 1/2 the battle to winning but exchange rate aptitude requires much effort, time and inclination.

 

Brian Twomey

Weekly Trades: EUR/USD and EUR/GBP

EUR/USD

Strategy. Short 1.1176 and 1.1202  to target 1.1106. Must cross 1.1151, 1.1126 and 1.1112. Short below 1.1102 to target 1.1063. Must cross 1.1076 and 1.1051.

EUR/GBP

Long 0.8482 and 0.8465 to target 0.8603. Must Cross 0.8499,  0.8533, 0.8554 and 0.8588,

Long above 0.8619 to target 0.8687. Must cross 0.8636, 0.8653 and 0.8670.

 

Brian Twomey

 

 

USD/JPY Purpose, Research and Forecast

USD/JPY is a middle currency pair, its a neutral currency pair. Cross pairs GBP/JPY, EUR/JPY and CHF/JPY trade above while CAD/JPY, AUD/JPY and NZD/JPY trade below.

The purpose of JPY cross pairs is to forecast USD/JPY. For GBP/JPY, EUR/JPY and CHF/JPY forecast bottoms only while CAD/JPY, AUD/JPY and NZD/JPY forecast bottoms and crucial topside resistance points.

Why JPY cross pairs forecast USD/JPY is because JPY cross pairs are attachment currency pairs and attached by design after WW 2 to ensure Japan and JPY’s survival as a nation and currency. Legacy truly matters to exchange rates.

What differed from DEM/USD to EUR/USD was a name change but the legacy exchange rate number remained the same. For a central bank to change its exchange rate numbers then the entire system of exchange rate numbers must change accordingly to ensure corrected numbers and currency market stability and trade ability.

The 2020 USD/JPY forecast by banks is 99.00. We’ve seen these thin air forecasts before and as usual, banks and forecasters were wrong. No such number will trade nor will USD/JPY come close to 99.00.

Best USD/JPY price is 104.00 and 102.00. And not much changed since my past yearly forecast articles to forecast 104 and 105 USD/JPY. For 2018 and 2017, USD/JPY bottomed exactly at 104’s.

JPY cross pairs is the main reason why 99.00 and 1000 pips won’t trade as 99.00 USD/JPY lacks compliance to its cross pairs.
From JPY cross pairs individually, GBP/JPY offers a contribution of 700 pips, NZD/JPY at 500, AUD/JPY at 400 then EUR/JPY and CAD/JPY at 300s.

CHF/JPY contributes to USD/JPY the least at 150 pips. CHF/JPY is traditionally a trending currency pair and at 150 pips, no real trend is seen. if the nearest exchange rate number to USD/JPY forecast slow movements and the highest GBP/JPY at 700 pips then 2020 reveals more of the same for USD/JPY.

More of the same means, why trade a neutral currency pair when trade in JPY cross pairs offers much more opportunity.

The purpose of this and other articles possibly to follow is to bring clarity and understanding to trading and exchange rates, respectfully a topic miles away from most trader and forecasters conception.

For example, early assessments from EUR/USD and EUR/USD purpose is to forecast EUR/GBP. This informs how vital and protected is EUR/GBP to overall EUR currency pairs.

A reason exists to each of 28 currency pairs and exchange rate numbers as all fit perfectly into the matrix of trades and trading to form a perfect market. Each exchange rate number corresponds perfectly to the next exchange rate number.

Exchange rates forecast perfectly exchange rate entries and targets. Any math formula, modern day indicators, chart readings on the planet can’t stand against exchange rates forecast exchange rates.

 

Brian Twomey

Merry Christmas and God’s Blessings

For on this day we celebrate the blessings from the gift of God in the life of Jesus Christ.

Whose powers of forgiveness and redemption, blessings and mercies, prayers and beliefs, grace and love allowed us all to live peacefully and comfortably in a fallen world.

For it is God’s gift in acceptance to treasures of the heart not the treasures of the pocket to allow a gentle, kind, smart and confident spirit to reign supremely among men and in response, the mind naturally follows its spiritual influence with thoughts and works of goodness, kindness, mercies to less fortunate and ability to follow the correct life path as Jesus intended 2000 years ago.

For it is not in the gift of exchange nor even in the abundance of today’s meal and the long preparation but its the thank you to god to show us through Jesus his blessings and kindness in the powers of prayer, forgiveness of sins, to reveal the living god,

to comfort us in storms, heal us when sick, provide for needs, wants and life’s desires. For when the heart and mind operate as one then the spirit is most strong, smart and restful.

For it is God’s tender mercies to allow us to believe and live a long life in its peace.

For it is those who walk life’s path humbly rather than the proud to receive God’s blessings, James 4:6

For God informs in James 4:2, ye have not because ye ask not.

For 1 Thessalonians 5:18 informs Give Thanks in all circumstances

For Hebrews 12: 1-3 informs throw off the yolk of sin and run with perseverance the race marked out for us

For Jesus informs in Matthew 28:20 Lo I will be with you always

          Merry Christmas

  Brian Twomey

 

CAD/CHF, EUR/CHF, GBP/CHF, AUD/CHF, NZD/CHF, USD/CHF

Dec 18 to Dec 23  CAD/CHF serves as the middle currency pair

 

 

Brian Twomey

 

CAD/CHF, EUR/GBP, GBP/USD, USD/CAD, EUR/USD, GBP/CHF

 

Dec 18 to Dec 22

 

 

Brian Twomey

Weekly Trades: EUR/GBP, CAD/CHF, USD/CHF and GBP/USD

Vast majority of Currency market price trading among 28 currency pairs is found in the dead center among relationships between EUR, GBP and CAD. To include cross pairs among the big 3 then 16 currency pairs are not only intertwined but influence remainder 12 currency pairs to complete all 28.

The import to 28 currency pairs on a larger scale is this G28 market influences and drives all EM currency pairs as EM and G28 are deeply linked and not separate entities. Analysts present EM currency pairs as if its a far away land against no relevance to G28 when in reality, its not true.

EUR/GBP and CAD/CHF are 2 most vital and highly special currency pairs to either trade alongside or influence the vast majority of currency pairs associated to its price and to include EUR, GBP and CAD.

To re- arrange EUR/GBP and CAD/CHF then 20 currency pair combinations exist between both pairs. To understand the 20 currency pair influence to all 28 then total 28 currency market combinations exists 378 or as groups of 3 for Triangulations factors to 84 currency pairs and as grouped by 4 currencies then 112 pairs exist.

The purpose to EUR/GBP and CAD/CHF for trading purpose is to forecast its price to other currency pairs but not necessarily to trade because neither pair moves significantly enough to bother trading.

What forecast means on a larger scale is exchange rates predict perfectly exchange rate entries and targets by use of a $5 calculator. This eliminates math and surely dinosaur indicators, charts, graphs, stops and all means to forecast exchange rates. Duetsch bank latest forecasts are based on the old exchange rate forecast formula in Purchasing Power Parities. This is not needed nor would I trust the forecasts.

Non movement to EUR/GBP and CAD/CHF performs its overall currency market function as not only the link to other currency pairs but to prevent price movements. EUR/GBP and CAD/CHF performs a stable influence to overall currency prices so prices don’t trade off kilter or worse, out of control.

EUR/GBP at close 0.8513 only association is to AUD/CAD and NZD/CAD by eyeball but EUR/GBP as 1.1 reciprocal influences EUR/USD, CAD/USD, CHF/JPY, CAD/NZD, CAD/AUD, CHF/EUR. Then EUR/GBP is supported by CHF/GBP at 0.78, USD/GBP at 0.76 and GBP/JPY at 0.70.

CAD/CHF at 0.7475 close only association is to far away prices in AUD/CAD and NZD/CAD but 1.33 reciprocal forms a different picture as views now influence USD/CAD, GBP/USD, GBP/JPY, GBP/CHF.

CAD/CHF long term target is located at 0.7613 or 1.3135. What is 1.3135 means USD/CAD, GBP/USD, GBP/CHF or a range to about 10 currency pairs.

Forecast 1 currency price to another currency price then ability exists to forecast and trade every currency pair weekly and long term quite easily.

Problem this week in currency markets is GBP prices are correct while remainder 18 currency pairs factors as either complete dead or erratic prices. EUR/GBP is correct.

Weekly Trades: CAD/CHF, EUR/GBP, USD/CHF and GBP/USD

CAD/CHF
Long 0.7452 and 0.7458 to target 0.7471. Long above 0.7478 to target 0.7504.

EUR/GBP
Long 0.8502 and 0.8481 to target 0.8581. Long above 0.8601 to target 0.8679.

USD/CHF
Long 0.8795 and 0.9805 to target 0.9868. Long above 0.9875 to target 0.9906.

GBP/USD

Short 1.3145 and 1.3202 to target 1.2944. Must cross 1.3088, 1.3031 and 1.2974.
Short below 1.2916 to target 1.2802. Must cross 1.2859 and 1.2831.

 

Interested in trades G28 and EM then contact

 

Brian Twomey,

Currency Market Triangulations and Combinations

EUR/USD V EUR/AUD V AUD/USD is one example of a Currency Pair Triangulation. Eliminate EUR from EUR/USD and EUR/AUD then

remainder pairs becomes USD/AUD Vs AUD/USD.

Triangulation trading was most popular from the 1970’s free float to 2009 when traders paid a full price for each lot. The Triangulation advantage and purpose before 2009 was to earn the discrepancy in pips between 2 price locations such as London Vs New York.

They called this arbitrage trading but done through Triangulations. London V New York routinely quoted 2 separate prices for the Ask Vs Bid Side or Buy V Sell. Generally the difference was a few pips but the trade and profit was guaranteed. Currency pairs had to arrange as 3 in order to view possible arrangements to take advantage of an arbitrage trade.

An arbitrage trade could be called a Scalp trade.

Since 2009, based on NFP Rules to pay a spread rather than a flat rate for each lot, the terminology was lost yet the concepts to triangulations are as old as the Bible and will remain for 1000’s of years in the future.

Triangulation depends on the 3 pair arrangement and what pairs a traders wishes to view.

If the arrangement was EUR/AUD, EUR/USD and AUD/USD then eliminate EUR and one views AUD/USD V AUD/USD. This doesn’t work.

If AUD/USD Vs EUR/USD V EUR/AUD is viewed then eliminate EUR and remainder becomes AUD/USD Vs USD/AUD. This works.

How about EUR/USD V AUD/USD V EUR/AUD. Eliminate EUR and remainder becomes USD/AUD Vs AUD/USD. This works.

28 currency pairs as 2 currencies per day factors as 378 combinations.

28 currency pairs as Triangulation or groups of 3 factors to 84.

28 Currency Pairs factored to groups of 4 = 112

 

How triangulation is viewed today is overbought Vs Oversold to 3 currency pairs, Relationship to vital point breaks and possible mis alignments. A mis alignment must align.

 

Brian Twomey

 

EM V G28 and 0 Point V 1 Point Currencies

EM V G28, O Point V 1 Point Currencies Difference between EM and G28 Currency prices is Nothing, Nada.

Both markets are the exact same. Analysts present EM as if its a different market in a far away land when in fact its not true.

The difference between EM and G28 is a Currency Nation Name and exchangerate number.

G28 is the driver to EM Prices.

Certain EM Pairs may or may not move as well as G28 yet influence to G28 remains.

Of 28 Total Currencies, 9 begin with 0 Point which leaves 21 Currencies to begin with 1 Point

Eliminate 6 for AUD and NZD and USDCHF then 2 very special currency pairs exist EURGBP and CADCHF

Both designed to severely contain EUR and  GBP  and USDCAD and Currency crosses.

EUR, and GBP and  CAD represent the entire G28 Market.

Currency Prices are not designed to move because the Currency Market is a self contained market as currency Prices and Pairs are counterbalanced against each other.

0 Point currencies are not designed to trade but to forecast

EURGBP contains EUR and GBP while CADCHF contains USDCAD.

Then GBPUSD V USDCAD alone contains each other.

This stifles EM movements except those EM designed to move as follows:

ZAR, TRY, RON, HUF, PLN and question to where SEK, NOK and MXN fit yet all decent movers.

                   Brian Twomey

EUR/USD V EUR/AUD V AUD/USD

In this currency market Triangular relationship, both EURUSD and AUDUSD Trade above respective vital high/ Low points at 1.1104 and 0.6853 while EURAUD trades below vital 1.6204.

EURAUD at current 1.6142 is deeply oversold while nothing special exists in highly neutral Statistical readings in EURUSD and AUDUSD.

Highly oversold EURAUD is confirmed by deeply overbought AUDEUR. Further confirmed by a AUDEUR noise ratio ready for explosion.

To rectify EURAUD, it must break 1.6204 and EURUSD must Trade higher while AUDUSD must travel lower.

Many Triangular mis matches exists.

For Example, USDJPY Trades above 108.77, EURUSD above 1.1104 and EURJPY above at 120.79.

Either EURUSD and EURJPY must break below or USDJPY must Trade below.

Same for GBPUSD, and GBPJPY and USDJPY.

USDCAD below 1.3207, CADJPY above 82.38 and USDJPY above 108.77 is a correct relationship.

CAD relationships to all Cross pairs for the most are fine.

USDCHF at break below 0.9871 to trade below is correct to EURUSD above 1.1104 but not necessarily correct to EURCHF below 1.0969. A correlation remains at play here.

 

Brian Twomey

GBP/USD and GBP/JPY New Trades and Trade Results

GBPUSD weekly trade as posted short 1.3359 to target 1.3127 traded to a bonus 1.3419. At a 60 pip bonus, the only choice available was to add 1 lot at 1.3419 or anywhere in the vicinity.

The common theme this week was missed entries and this happens in certain weeks but the key is to understand the extra pip profits the market offered. Missed entries however are never far off from the actual recommended entry point.

At 1.3419, 2 trades were running from 1.3419 and 1.3359. Both trades achieved targets at 1.3127 for a total of 524 pips. Broken down by 292 pip from 1.3419 and 232 pips from 1.3359.

GBP/JPY short from 145.75 to target 142.88 traded to a true bonus at 146.77. Add 1 lot anywhere in the vicinity of 146.77 and trade to target. Now 2 trades ran from 146.77 and 145.75.

GBP/JPY traded to lows 143.06 and both trades are running +640 pips broken down by +371 pips from 146.77 and +269 from 145.75.

Total 2 GBP trades and 2 day total running 1164 pips. GBP/JPY contains 18 pip to target.

USD/CAD entry at 1.3166 to target 1.3223 traded to lows 1.3115 and note the common theme this week to missed entries. Add 1 lot to 1.3115 and trade to 1.3223 target. Highs this week achieved 1.3184 broken down by +69 pips from 1.3115 and +18 from 1.3166 for total 87 pips.
Overall, trades are few but profit high and this is ongoing for the past 16 years.

GBP/USD

GBP/USD massive supports are located at current 1.2950 and 1.2928. A break at 1.2928 requires GBP/USD trade to 1.2992. This achieves by a break lower at 1.3055.

Higher to short again for the week is located at 1.3182 and 1.3213 to target 1.3055 then 1.3029. Inside the price path to 1.3182 is day trade top at 1.3161. For today only, short 1.3161 to target 1.3055 and 1.3029. GBP/USD at 1.3055 and 1.3029 will bounce to easily 1.3128.

GBP/JPY

The 142.88 target must break 143.02 then next 142.81 and 142.61. GBP/JPY will bounce from 142.81 and 142.61 to target easily 143.68. New weekly shorts are located at 143.84 and 144.24.

 

Brian Twomey

Currency Markets Defined

Currency Markets as a whole viewed from distorted JPY pairs trades totals 2 1/2 Standard Deviations. Factors as 2.65 and ranges from 46.99 to 44.34. Overall Translates as 265% and 26,500 Basis Points. The purpose to factor JPY as currently traded is to understand the entire mathematical length and ranges to currency prices. Yet factor JPY as 0.01 is off kilter to remainder 21 currency pairs against total 28.

The entire Currency market factored to JPY as is, reciprocals or JPY rearranged any manner reveals the Currency Market is miles to high. To understand what miles to high means, currency markets trade a correct range from 0.7443 -1.5329. Any currency pair trades above or below is either overbought or oversold.

Eliminate JPY but include GBP/JPY then the currency market range becomes 0.7696 to 1.6082. The difference to the range equates to USD/JPY and all cross pairs trade a total available of 500 pips.

Reciprocal currency pairs for the total market trades from a range 0.6589 to 1.2989. Eliminate JPY except GBP/JPY then all currencies as reciprocals range 0.6393 to 1.3319. Or NZD V GBPUSD USDCAD and GBPCHF

Most vital levels to all 28 currency pairs are located at 1.0937 1.1386 and 1.3247.

Note 1.3247 and 1.2989. The vast majority of currency price trade action is found in the center and this is represented predominately by GBP/USD and USD/CAD as most vital to overall currency markets. An example.

Closing Prices

GBP/USD 1.3328
USD/CAD 1.3166
GBP/CHF 1.3106
CAD/CHF 0.7475
EUR/USD 1.1118

As Reciprocals

USDGBP 0.7503
CADUSD 0.7595
CHFGBP 0.7630
CADCHF 0.7475
USDEUR 0.8994

Represented by reciprocals is USD/EUR as outlier, 1 USD Currency USD/GBP Vs counter currency pair CAD/USD and CADCHF as forecast Currency and CHF/GBP as safe haven. The driving force to all currency prices is GBP/USD and CAD.

To total 28 currency pairs, 8 currency pairs are represented by a 0 Point. Those 8 currencies with 0 point not only self contain a market control for higher 1 point currencies but perform correct duties to forecast higher 1 point currencies.

An example

EURAUD Broke 1.6201, then traded higher but 1.6201 is a statistical point of reference.

Actual reality forecast from central bank interest rates, AUD/EUR Bottoms are located at 0.6149, 0.6141, 0.6134 and 0.6126.

AUD/EUR translates as EUR/AUD 1.6262, 1.6283, 1.6302 and 1.6323.

AUD/EUR overnight range factors as 0.6153 to 0.6167 or EUR/AUD most vital break point levels at 1.6252 and 1.6215.

AUD/EUR 14 pips as overnight range only traded less than 1/2 its allowable daily range.

Rarely are 0 point currencies traded at full daily ranges because this is not only how currency prices are controlled but 0 point currencies are employed as forecast currencies.

If AUD/EUR was allowed to trade its full 32 pip daily range then EUR/AUD range becomes 1.6155 to 1.6323.

Currency prices and pairs easily defines itself as a chess game. For every white move, black must counter and vice versa. White may violate black space but then retreat against Black’s defense. This may take a minute but it defines currency price lead and lags as well as overbought and oversold. The currency price as Chess game reveals how to forecast currency prices from other currency prices without use of charts, graphs and sophisticated math. Simply, currency prices forecast currency prices by use of a calculator.

 

Brian Twomey

Weekly Trades: GBP/USD, GBP/JPY, USD/CAD and USD/JPY

GBP/USD this week vital ranges are located from 1.2950 to 1.3451 and 1.3566. Note the 600 pips and a perfect currency pair range. GBP pairs are actually the only currency pairs with viable trade ability to earn pips.

GBP/USD Trade

Short 1.3329 and 1.3359 if seen to target 1.3127. Must cross 1.3302, 1.3244 and 1.3186.

GBP/JPY

GBP/JPY ranges are located from 142.05 to 147.54 and a 550 pip range.

GBP/JPY Trade

Short 145.75 if seen to target 142.88. Must cross 145.03, 144.31, 143.59 and 143.23.

USD/CAD

Long 1.3166 to target 1.3223. Must cross 1.3178, 1.3196, and 1.3214.
Long above 1.3232 to target 1.3277. Must cross 1.3250 and 1.3268.
Short 1.3277 to target 1.3241. Not again 3 trades.

USD/JPY

USD/JPY trades above its vital break point at 108.57. USD/JPY above 108.57 is a mis position in relation at EUR/USD, GBP/USD, AUD/USD and NZD/USD as all trade above vital high / low points at 1.1088, 12894, AUD at 0.6843 and NZD/USD at 0.6487.

Either USD/JPY breaks below 108.57 or EUR, GBP, AUD and NZD must trade lower as all currency pairs cannot trade at current levels.

USD/JPY massive points to trade higher are located at 109.64 and 110.01. For JPY cross pairs EUR/JPY approaches its vital line at 123.65, NZD/JPY 73.22, and AUD/JPY 78.00’s.

USD/JPY  Trade

Short 109.21 and 109.54 to target 108.72. Must cros 108.89. Short 108.57 to target 107.91. Must cross 108.24. Long 107.91 to target 108.40. Must cross 108.24.

USD/JPY is not worth the effort and its traded only daily but USD/JPY fails to meet the weekly targets and trade ranges at minimum 150 pips.

Brian Twomey

Gold

The negatives to the Gold price is severely overbought and trades above its 5 year average at 1262.19. Gold is correct to trade above its 5 year average alongside DXY above its 5 year average at 95.01. Gold and DXY however are both not correct to prices as the S&P’s also trades above its 5 year average at 2405.44.

Gold and DXY are historic non risk assets and both can’t trade alongside risk asset S&P’s. Either Gold and DXY must break its 5 year averages or remain in current position while the S&P breaks its 5 year average.

If markets are viewed correctly from a safe bond Vs risk yield perspective then DXY and Gold represents the safety of a bond price while the S&P as risk asset represents the yield side to the equation. Both Gold and DXY must factor negative correlations to the S&P’s. Gold and DXY factor negatively to most currencies except those few cross currency pairs as true USD dollar pairs.

One day, the Gold V DXY V S&P relationship will bust wide open then each financial asset will assume its correct trade position.
Gold from current 1475.76 must trade lower to minimum 1350.00’s. Gold achieves 1350.00 targets by breaks lower at 1471.94, 1418.39 then 1387.87, 1376.39 and 1359.45.

Severely overbought Gold translates as a short only trade strategy.

The Gold price lacks ability for big moves and explains its daily slow price grinds.

To understand overbought, Gold price extremes are located from 1553.97 to 1617.76.

From a 24 hour perspective, Gold factored to interest rates reveals the current top at least for today at exactly 1600.00.

For the 24 hour Gold trade, long at 1468.38 to target 1484.32 on a break of 1478.43. Any price above 1484.32 is a bonus trade for shorts. Any price below 1468.38 is a bonus to longs.

 

Brian Twomey

Exchange Rate Research

GBP/JPY 145.67 OR 1.4567

EUR/JPY 121.56 OR 1.2156

CHF/JPY 111.48 OR 1.1148

USD/JPY 109.31 OR 1.0931

CAD/JPY 83.00 OR 0.8300

AUD/JPY 75.14 OR 0.7514

NZD/JPY 72.05 Or 0.7205

GBP/NZD 2.0208 or 0.4948

GBP/AUD 1.9379 Or 0.5160

GBP/CAD 1.7545 Or 0.5699

EUR/NZD 1.6858 Or 0.5931

EUR/AUD 1.6164 or 0.6186

EUR/CAD 1.4645 OR 0.6828

GBP/USD 1.3328 Or 0.7503

USD/CAD 1.3166 Or 0.7595

GBP/CHF 1.3106 Or 0.7630

EUR/USD 1.1118 Or 0.8994

EUR/CHF 1.0945 OR 0.9136

AUD/NZD 1.0417 OR 0.9599

USD/CHF 0.9835 OR 1.0167

AUD/CAD 0.9055 OR 1.1043

NZD/CAD 0.8691 OR 1.1506

EUR/GBP 0.8346 OR 1.1081

CAD/CHF 0.7475 OR 1.3377

AUD/USD 0.6873 OR 1.4549

AUD/CHF 0.6767 OR 1.4777

NZD/USD 0.6590 Or 1.5174

NZD/CHF 0.6496 Or 1.5394

 

Full Currency Market Statistics, Must Rearrange JPY currencies to include most vital GBP/JPY. Offers perfect assessments for all 28 currency pairs.

Distortions to include JPY pairs as is including GBP/JPY. However Med +and minus  offers dev = 2 1/2

 

Brian Twomey

 

 

Interest and Exchange Rates

World markets are connected by interest rates. Then comes The derivative of interest rates and those are exchange rates.
The Federal Reserve begins the 24 hour interest rate cycle every trading afternoon, all nations then follow. The pattern nation to nation is a deep down slope, starts with the Fed then RBNZ and ends with Eur and ECB then CAD and the BOC.

The Fed lowest rate today 1.51. Then comes the RBNZ highest interest rate today at 1.56 then 1.42. The BOJ is next at 0.99.
From the RBNZ lowest rate today at 0.75 comes the RBA lowest rate at 0.60. The ECB lowest rate today 0.72. Then Sonia at BOE sneaks in at 0.70. The BOC and CAD at 1.74 reports during American market trading.

Here’s the list and times reported

Fed 1.51 at 4:15 pm
RBNZ 1.56 and 0.75 at 3:00 PM New Zealand or 9:00 pm New York.
BOJ 0.99
RBA 0.60 to 0.76 at 10:00 PM New York
SNB 0.75
BOE 0.70 at 5:00 am New York
ECB 0.72 to 0.509. at 5:30 am New York
BOC 1.74 at 9:00 am New York

Then begins a new day starting the next 24 hours with the Fed. The Fed is the world dictator to interest rates and by its derivative, dictates DXY.

The RBNZ at 1.56 and above Fed rates is an abnormality as the RBNZ must price its interest rates below Fed Rates in order for ability of all nations continuity to price its interest rates from the RBNZ. As one nation prices its interest rates then the next nation prices from the last reported nation but it all begins with the Fed and RBNZ.

New Zealand serves its purpose among trading nations due because it receives Fed interest rates first. If the RBNZ rates are off kilter, it means all nations are off sync. it means exchange rates will trade off kilter. It means normal daily support / resistance levels lack uniformity. It might mean an overbought currency price may trade higher despite overbought. Many scenarios exist.

NZD/USD for example began the week seriously overbought but it rose and never had the ability to trade lower to relieve its overbought condition.

Any nation can report off kilter interest rates but normally it starts with the all important Fed rates then all nations comply to either an adjustment or all nations remain off kilter for 24 hours.

After interest rates are reported an exchange rate must match.

Here’s an example to NZD from days ago.

From daily Fed 1.53, means NZDUSD begins its day at 0.6535. NZD then lives through RBNZ news announcements from 0.6535 until the interest and Exchange rate Fix from the RBNZ at 3:00 pm NZD or 9:00 PM New York. AUD and the RBA then follows 1 hour later at 10 pm.

Every central bank releases its own series of interest rate maturities.

RBNZ runs today from 0.95 to 1.56. AUD runs from 0.96 to 0.60 then the ECB from 0.72 to 0.50. When interest rates are correctly priced, maturities from nation to nation match or better stated, always a few maturities overlap or trade together.
NZD for example 0.91 matches AUD 0.96 and 0.89. NZD 0.75 matches AUD 0.76 and 0.72. The ECB 0.72 matches AUD 0.76 and 0.72. ECB’s middle rate at 0.60 matches AUD 0.60.

Imagine a yield curve from nation to nation and matches to yield spreads then one would understand interest rates. Many employ yield spreads for trade decisions but this is not correct since interest rates price yields. Exact entries and targets will be off kilter due to yields secondary signal.

Every trading day interest rates change therefore new interest rates factored to currency prices is a daily routine to know the new daily support/ resistance points and targets. If interest rates go seriously off kilter then trading ranges may change radically.

 

Brian Twomey

GBP/USD and GBP Targets

For the past 12 months, long term targets per currency pair were written ad nauseam because long term targets must not only achieve trade objectives but it doesn’t matter to a current price of a currency. When GBP/USD traded from 1.3400’s to 1.1900’s, the long term target never materially changed.

For example, 12 months ago, GBP/USD’s long term target was written 1.3800’s. In 18 months, averages dropped therefore long term targets went from 1.3800’s to current 1.3380. The 9 year currency cycle bottom at 1.1977 not only traded but 1.1977 was a higher low from October 2016 at 1.1903.

GBP/USD long term targets offered not only opportunity for the easiest long term and most profitable trade but no effort was involved. GBP/USD achieved its 1.3380 target yesterday after a 4 month wait period from the 1.1900 bottom and a 1400 ish pip profit.

The lower GBP/USD traded offered not only a trade direction long but added profits.

GBP/JPY Long term target at 148.05 achieved its destination yesterday and traded to 147.90. A target objective forecast many months ago and only off by 15 pips. GBP/JPY traded lows at 126.00’s and target achieved for a 2100 pip gain.

GBP/CHF achieved its long term target at 1.2912. GBP/AUD big line is located at 1.9451.

GBP/CAD and GBP/NZD and for the most part, GBP/AUD are irrelevant to long term targets due to their extraordinarily wide ranges. GBP/USD, GBP/CHF and GBP/JPY are the drivers to GBP/NZD, GBP/CAD and GBP/AUD as GBP/NZD,GBP/AUD and GBP/CAD just roll with daily, weekly and monthly punches.

Many 4, 5 and 700 pip trades were written here and targets achieved. And the story remains the same as in 2012, no charts, graphs, stops nor concern to daily market pablum. And targets achieve to the exact pip.

My forecasts are not only perfect but one must however believe in the numbers. And one must also note the 8 year consistency to targets, a consistency achieved and learned over many, many years of hard work. Proud accomplished is ability to beat any banker forecast. And not only currencies but any market price on the planet.

This week’s GBP trades contained 3 round shorts. The first short from 1,3214 to 1.3126. Then 1,3229 to 13051. Now short from 1.3500’s. We’re running +266 pips on 2 trades and much more will follow upon current short targets. Our trades are more games of ping pong as we trade currency prices up and down, up and down throughout the week.

GBP/USD. Big line above 1.3520 and 1.3560. Ironic to dead stop yesterday at 1.3515. GBP/USD price extreme is located 1,3617.
Short targets are located at easily 1.3135 upon a break of 1.3376.

GBP/JPY short targets are located at 143.06 easily upon a break of 146.06. GBP/JPY price extreme is located at 149.08.

GBP/AUD caution 1.9451 and shorts below to target 1.9226.

GBP/CHF Targets 1.2550 upon a break of 1.2767.

Brian Twomey

Weekly Trades: AUD/NZD, NOK/SEK, USD/PLN, USD/HUF, USD/INR, USD/RUB

NOK/SEK and AUD/NZD are the exact same pair against identical exchange rate numbers. Together, both provide a double trade. NOK/SEK at current 1.0400’s provides support to USD/NOK and USD/SEK at 9.0000’s.

Both NOK/SEK and AUD/NZD are oversold, AUD/NZD is far more oversold than NOK/SEK. Both trade below 5 year averages at AUD/NZD 1.0718 and NOK/SEK approaching at 1.0487. Explains why NOK/SEK is less oversold than AUD/NZD. Its a question of distance.

Among 36 EM currency pairs, AUD/NZD and NOK/SEK exchange rates are listed at the lows. Both are located between USD/SGD at 1.3600’s and AUD/SGD at 0.9300’s. AUD/NZD shares a combination location between EM and G28. Below AUD/NZD and NOK/SEK in G28 proximate currency pairs are AUD/CAD 0.9000’s, NZD/CAD 0.8600’s and EUR/GBP 0.8400’s.

G28 currency pairs drive EM as G28 pairs contain lower exchange rate numbers and are more widely traded. Higher EM exchange rate numbers are built into the system to ensure economic viability. If G28 currency pairs crash, EM currencies won’t ever fall to Zero. EM currencies can always rebuild and trade to acceptable levels.

USD currencies were chosen today because EUR among practically every currency on the planet contains severely high and deeply dangerous Noise Levels. Thus means not only will prices not perform due to range persistence but a spark from an outside event can send EUR into wild spikes. Range persistence is quantified by extremely low variation against high noise. Only EUR pairs correct are EUR against PHP, BRL, HUF, ILS, ISK Krona, KRW, NOK, RUB, SEK and THB.

USD/RUB is offered due to a central bank meeting this week yet RUB is not only a dead issue currency pair, it falls almost into a fixed exchange rate.

USD/PLN and USD/HUF as always are not only terrific currency pairs but both trade correctly and respond perfectly to targets. USD/RON is the third to complete the trifecta.

USD/PLN

Long 3.8539 and 3.8457 to target 3.8701. Must cross 3.8580, 3.8621 and 1.3662. Long above 3.8785 to target 3.8949. Must cross 3.8826 and 3.8867.

AUD/NZD

Long 1.0432 and 1.0395 to target 1.0543. Must cross 1.0432 and 1.0506. Long above 1.0581 to target 1.0654. Must cross 1.0694 and 1.0617.

NOK/SEK

Long 1.0325 and 1.0364 to target 1.0522. Must cross 1.0404, 1.0443 and 1.0482. Caution 5 year average at 1.0487.

USD/HUF

Long 294.65 and 293.90 to target 298.39. Must cross 294.64, 295.38, 296.15, 296.89 and 297.63. Long above 299.14 to target 300.63. Must cross 299.88.

USD/INR

Long 70.19 and 70.42 to target 71.01. Must cross 70.66 and 70.89. Long above 71.12 to target 71.59. Must cross 71.36.

USD/RUB

Long 63.67 and 63.45 to target 64.03. Must cross 63.91. Long above 64.16 to target 64.49. Must cross 64.38.

 

Brian Twomey

Exchange Rates

 

GBP/JPY 142.58

GBP/JPY 1.4258

GBP/NZD 1.9989

GBP/AUD 1.9185

GBP/CAD 1.7397

EUR/NZD 1.6835

EUR/AUD 1.6161

USD/CAD 1.3248

GBP/USD 1.3131

GBP/CHF 1.3000

AUD/JPY 74.27

CAD/JPY 81.90

NZD/JPY 71.26

EUR/USD 1.1059

AUD/USD 0.6839

AUD/CHF 0.6772

NZD/USD 0.6562

NZD/CHF 0.6500

 

GBP/JPY =71.61

GBP/JPY =1.0410 and 1.0379

GBP/NZD 1.3275 and 1.3244

GBP/AUD 1.2873 and 1.2842

GBP/CAD 1.1979 and 1.1948

EUR/NZD 1.1698 and 1.1667

EUR/AUD 1.1361 and 1.1330

USD/CAD 0.9905 and 0.9874

GBP/USD 0.9846 and 0.9815

GBP/CHF 0.9781 and 0.9750

AUD/JPY 0.6994 and 0.6963

CAD/JPY 0.7376 and 0.7345

NZD/JPY 0.6844 and and 0.6813

EUR/USD 0.8810 and 0.8779

AUD/USD 0.6700 and 0.66 7

AUD/CHF 0.66 7 and 0.663

NZD/USD 0.6593

 

 

 

 

Weekly Trades: USD/CAD V GBP/USD, GBPCAD, NZD/JPY

The most interesting and defining currency market relationship this week is found between total opposites USD/CAD and GBP/USD.

GBP/USD ranged last week from 1.2897 to 1.3166 for 269 pips while USD/CAD traded 162 pips lower from 1.3320 to 1.3158. GBP/USD bounced from 1.2897 and just below our vital break point at 1.2759 as reported in last week’s post. USD/CAD broke most important 1.3254.

Last week GBP/USD and GBP/CHF traded in tandem at 1.2900’s then GBP/CHF traded 122 pips lower as highlighted from last week’s posted trade. While GBP/USD bolted higher Wednesday to 1.3100’s to trade in tandem to USD/CAD at 1.3100’s. GBP/USD and USD/CAD both at 1.3100’s is an impossible relationship to hold as either GBP/USD or USD/CAD must separate. GBP/USD held steady at 1.3100′ s while USD/CAD traded higher to 1.3200’s.

GBP/USD long term target currently resides at 1.3380. From GBP/USD’s close at 1.3131, the target is 249 pips. USD/CAD’s long term target is 1.2886. From USD/CAD’s close at 1.3248, the target is 1.2886 or 362 pips. The imbalance and trending pair is clearly GBP/USD.

When GBP/USD traded from 1.2900’s to its 9 year currency cycle bottom at 1.1900’s, the drop was not only straight down to trade in deep oversold every week but without a meaningful correction. When GBP/USD broke its vital high / low point at 1.2700’s, every week it traded higher against deep overbought. While GBP/USD trended from its uppermost highs and lows, USD/CAD since July traded a 300 pip range from 1.3000’s to 1.3300’s.

While USD/CAD’s restricted price ranges are experiencing a severe compression to its averages and warns of a massive break out in order to trade again normally. GBP/USD averages and ranges traded and currently trades perfectly normal since July. The big mover historically is clearly GBPUSD Vs USD/USD and this was accomplished not by the market but by central bank design inside the exchange rate numbers.

Overall GBP/USD is overbought , GBP/CAD and GBP/CHF is overbought. GBP/AUD the favored long term short trade is overbought. its longer term averages from 50 to 253 day to bring GBP significantly lower and all are at or approaching its extremes.

No different in GBP overbought from the EM space as GBP/ILS and GBP/THB stand out as significantly overbought across the board followed by GBP/CZK, GBP/TRY, GBP/RUB, GBP/RON, GBP/MYR.

GBP/BRL stand out as oversold and GBP/ZAR, GBP/SEK and GBP/NOK fairly neutral while the following pairs are on the verge to overbought provided a price increase is seen as follows: GBP/PHP, GBP/PLN, GBP/MXN, GBP/INR, GBP/HUF.

Trades

For the week, USD/CAD from its 1.3248 close contains massive supports at 1.3161 and 1.3183. On the upside, USD/CAD must break 1.3249 and 1.3261 in order to travel higher. USD/CAD current price is fairly neutral.

GBP/USD higher last week cleared a significant resistance point at 1.2926. To trade significantly lower to 1.2600’s, GBP/USD must break 1.2926, 1,2888 and 1,.2819.

The commonality to GBP/USD 1.2926 and ability for all GBP pairs to trade lower is GBP/CAD must break 1.7009 then 1.6986,

GBP/CHF remains solid at 1.2700’s, GBP/JPY 141.80 ahead of 139.26.

GBP/AUD on the opposite side must break crucial 1.9400;s to trade higher.

USD/CAD will trade erratic this week and here’s the trade

USD/CAD

Long 1.3224 and 1.3199 to target 1.3236.
Long above 1.3249 to target 1.3299. Must cross 1.3274.
Short 1.3299 and 1.3324 to target 1.3261. Must cross 1.3274.
Any price above 1.3324 is free trade short.

GBP/USD

Short 1.3148 and 1.3195 to target 1.2966. Must cross 1.3007.
Break 1.2926, targets 1.2872. Must cross 1.2901.
Any price above 1.3195 is a free trade and free money to add to shorts.

GBP/CAD

Short 1.7437 and 1.7469 to target 1.7046. Must cross 1.7373, 1.7309, 1.7244, 1.7180, 1.7116 and 1.7062

NZD/JPY

Short 71.50 to target 70.29. Must cross 70.83 and 70.49.
Short below 70.16 to target 69.48. Must cross 69.82

Brian Twomey