Long Term Targets: 20 Currencies

Currency price commonality over the past 3 -4 years was a vast majority of the 28 pairs traded below 5 year averages, weekly trades and targets were 150 to 200 ish pips for 12 and 18 currency pairs and approximately 20 pairs traded miles below its ranges. A few examples.

GBP/USD upon the Brexit drop contained a long term target at 1.3600’s, the second year 1.3400’s and today 1.3200. EUR/USD in 3 years went from a 1.1600’s target to today 1.1400’s. AUD/USD in 3 years contained a target at 0.7800 to today 0.7200’s.

GBP/USD target dropped 200 pips per year, AUD/USD dropped 200 pips per year and EUR/USD dropped about 70 pips per year. All long term targets achieved destinations.

A long term target is a range price and must achieve its location to affirm a normalized price. View a normalized price as a price alignment. For the past 3 and 4 years, a vast majority of currency prices traded under non normal and non alignment status.
The difference between currency prices today from the past 3 to 4 years is most pairs trade within its own respective ranges however just barely.

The difference between a long term target price under non normal status and a price trading within its own range is non normal status offers a target, a direction, a trade, an understanding to price location. The opposite is true to a price within range.

Not known to a range price is a long term target, a direction, a trade yet an understanding to price location. A currency or any market price within range is a settled price and a dead price to trade within respective ranges. A price within its range is surrounded by vital averages and not able to move and a weekly trade that offers about 100 pip trade targets as opposed to 150 to 200 under non normal trade status.

Upon a long term target achievement, the price normally trades a long term reversal to then again re factor a long term target. This scenario highlights non normal markets again. The danger to a long term target completion is the range question as a price has every right to continue within its range or trade a long term reversal.

GBP/USD for example achieved its 1.3400’s target in 2019 then dropped to 1.2000’s and a spike low to 1.1400’s. GBP/USD today at 1.3200’s was the long term target re factored and written in mathematical stone and it doesn”t matter where trade lows are located.

From the 1.3400 target, GBP/USD went from normal to non normal or range to non normal and a 200 pip drop to 1.3200 to its long term target.

20 currency pairs were evaluated to long term model targets. The model is not only exact to pip targets as demonstrated a gazillion times but no need exists to run the model until a target is achieved. GBP/USD for example only required to run the model once per year over the past 3 years. Same for EUR/USD, AUD/USD and a vast majority of currency pairs.

To targets and ranges are trading right at 300 ish pips for most currency pairs.

GBP/NZD Vs EUR/NZD

A deep dysfunction exists between GBP/NZD and EUR/NZD. EUR/NZD trades safely above its 5 year average while GBP/NZD trades below. EUR/NZD averges are dropping while GBP/NZD averages are rising. Short term Correlations run +40% and should run much higher to inform a proper relationship. This won’t happen as GBP/NZD price is low and should trade much higher. Supports are located at 1.9400’s and 1.9500’s and the 5 year average at 1.9456.

EUR/NZD supports are located from 1.6900’s to 1.7200’s and trades within its range below 1.7685 and 1.7640. EUR/NZD’s price should trade much lower and informs a short only strategy far into the distant future.

EUR/AUD V GBP/AUD

Short term correlations run +93% and an extraordinary deception. GBP/AUD trades in a 900 pip range and a specific target is found inside its range. GBP/AUD wide range rarely if ever breaks as the price adjusts to overall GBP pairs within the GBP universe. Break of 1.8457 targets 1.8847. Massive supports are located from 1.8000’s to 1.8200’s.

EUR/AUD averages are dropping by the month and currently, EUR/AUD is miles overbought. EUR/AUD targets 1.5974 on a break of 1.6100’s. Above 1.6438 1.6444 and 1.6476, EUR/AUD heads higher to high 1.6500’s and low 1.6600’s. Recommendation is caution to longs above 1.6400 as shorts contain an easier 700 pip trade and because a EUR/AUD price above 1.6400’s doesn’t exist.

EUR/CAD

Long term target is 1.5019 and EUR/CAD at 1.5400’s is deeply overbought.

USD/CHF and CHF Cross Pairs: Deep oversold

USD/CHF massive resistance across all vital averages at 0.9600’s and all averages are deeply oversold to extremes. Long term target 1.9476.

AUD/CHf. Long term target 0.7030 and deeply oversold

NZD/CHF. Long term target 0.6510

GBP/CHF. Long term target 1.2562

CAD/CHF. Long term target 0.7378

EUR/CHF. Not worth the effort to trade.

USD/CAD Vs CAD/JPY

Range trades for both. USD/CAD strategy is short only as USD/USD at 1.3000’s should trade miles lower into low 1.2000’s. CAD averages are dropping however slowly. CAD/JPY however meets massive resistance at 83.00’s to 85.00’s.

AUD/USD, AUD/JPY, AUD/CHF.

AUD/USD and AUD/JPY long term target achieved at 0.7200’s and AUD/JPY 78.00’s. AUD/CHF price is low and oversold and the driver pair to higher AUD/USD and AUD/JPY.

GBP/CAD

A wide range currency pair and no target as GBP/CAD trades in wide ranges and ranges adjust to underlying USD/CAD and GBP/USD movements.

EUR/USD and EUR/JPY

EUR/USD big break 1.1452. Massive resistance 1.2300’s to 1.2500’s.
EUR/JPY range 123.23 to 129.08. Nothing special here.

GBP/USD and GBP/JPY

GBP/USD Big point 1.3205 Vs thick supports and many at 1.2800

GBP/JPY. Big Point 141.74, down from 147.00’s over 3 years or 200 pips per year.

NZD/USD

NZD/USD Big Point 0.6724. Range trade and nothing special here.
NZD/JPY. Big break point 71.69 and 71.51.

Best Long term trades: USD/CHF and CHF cross pairs, EUR/CAD, GBP/CHF, EUR/AUD. For CHF cross pairs best are GBP/CHF and AUD/CHF.

Oversold CHF cross provides supports to underlying NZD/USD, AUD/USD, GBP/USD but a far different arrangement to USD/CAD Vs CAD/CHF. USD/CAD is the driver pair to CAD/JPY and CAD/CHF.

All concepts found in levels, ranges and targets.

 

Brian Twomey

 

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