Upon the new 3 month review to my long term model that encompasses our 18 currency pairs traded weekly, nothing changed to EUR/USD.
In June. EUR/USD big break point to trade higher was located at 1.1987, today the big break point remains 1.1987.
Above 1.1987 then next comes the 10 year average at 1.2175 and a break targets 1.2400 to 1.2600’s. However, a total of 10 averages ranging from 1.2400’s to 1.2600’s face EUR/USD above 1.2175. At 1.2600’s represents top of the range to my averages dating to 1999.
The EUR/USD rise from 1.1200’s to 1.1900’s in 15 days was the result of not only a break of its high/ low point at 1.1200’s but the break higher of the 5 year average at 1.1288. EUR/USD was given the green light to move significantly higher.
EUR/USD became the first and leader currency to break its 5 year average. Then next was EUR/JPY at 124.00’s, GBP/USD 1.3216, AUD/USD was next to follow at 0.7282 and NZD/USD is close at 0.6806. USD/CAD broke at 1.3190.
Previously, 24 of 28 currency pairs lived for the past 3 and 4 years trading below 5 year averages.
Moving averages don’t change fast enough to consider or allow 1.2175 will break then trade to 1.2400’s to 1.2600’s anytime soon.
Due to 1.1987 and 1.2175, our strategy changed from long only to short only against a target to 1.1400’s.
GBP/USD. Big break for lower is located at 1.3352 and this line broke Wednesday. Above 1.3352 then massive resistance is located at 1.3800’s and 1.3900’s. Below then next is the 5 year average now at 1.3218 then solid supports at 1.2800’s. Note 1.3300 ‘s to 1.3800’s is 500 pips and below 1.3300’s to 1.2800’s is 500 pips. We maintain a long drop strategy.
AUD/USD next big lines above are located at 0.7721 and range top at 0.7838. No changes to 0.7838 over the past 3 years as this line hasn’t changed.
AUD/USD big break lower is located at 0.7371 then the 5 year average at 0.7281 and 0.7050. AUD/USD 0.7371 to 0.7700’s is 400 pips and 0.7371 to 0.7050 is 300 pips.
AUD/JPY. 79.82 Vs 76.38. Above 79.82 targets the 5 year average at 80.46 then 81.33. No significant changes for AUD/JPY over years.
GBP/CAD break 1.7285 then the 5 year average targets 1.7000’s.
GBP/CHF Remains significantly depressed and targets 1.2562 easily. GBP/CHF must break 1.2365 to achieve 1.2500’s. Great currency pair and long drop strategy.
EUR/JPY. Lower must break 124.90, 124.82 and 124.68 to target massive supports at 123.00’s. Above 124.90 then EUR/JPY faces 10 averages from 127.00’s to 130.00’s. Higher must break 126.16. No thrills to EUR/JPY.
GBP/JPY higher must break 144.93 then 146.24 and 146.92. Below 144.93 targets 139.00’s and range bottom at 135.00’s. A far better pair to trade as opposed to EUR/JPY and AUD/JPY. Assumption is NZD/JPY will reveal the same small range movement as AUD/JPY. Meaning MA’s are to close to consider big moves.
Overall and a speculation from 8 currency pairs is currency markets are fairly stable again and prices in a decent equilibrium to ranges from 2 to 500 pips.
Further speculation is big moves will be seen in GBP/NZD, EUR/NZD, EUR/CAD, EUR/AUD, GBP/AUD and GBP/CHF. For JPY cross pairs will suffer except GBP/JPY. For USD/CAD was born a wide movement currency pair and significant moves higher are expected.