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

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