About 1 month ago, GBP/USD, AUD/USD and NZD/USD prices broke above 5 year averages and caused a severe mis alignment to the remainder 25 currency pairs. Required to align was either remainder 25 currency pairs break above 5 year averages or GBP, AUD and NZD break below. The synopsis.
EUR/USD remains inside the 10 and 14 year averages at 1.2124 and 1.2632. At 1.2600’s, EUR trades at the top of its averages dating to 1999. Break below 1.2124 and 1.1963 targets 1.1700’s. And this is exactly where EUR will trade. Nothing special for this week as EUR closed in dead neutral.
EUR/JPY 5 and 10 year averages are located at 124.24 and 123.82 while the 14 year is located 200 pips above current 126.26 price at 128.51. The range is pretty much 200 pips from 125.00’s to 127.00’s. EUR/JPY is overbought for this week.
EUR/AUD sits comfortably above 1.5611 and deeply oversold for this week. Big break higher is located at exactly 1.6181 to then target 1.6200’s.
The movers to the EUR complex and best trades are EUR/USD, EUR/JPY and EUR/AUD.
GBP/USD Must break 1.3223 and the 5 year average at 1.3085 to travel lower. Short and medium term, GBP is deeply overbought. GBP is massively overbought for the week.
GBP/JPY approaches its 5 year average at 143.23 and overbought for the week.
GBP/USD and GBP/JPY are clear drivers to remaining GBP cross pairs.
GBP/NZD and GBP/AUD 5 year averages are located at 1.9215 and 1.7986.
The drivers to AUD are AUD/USD and top pair in the AUD complex, AUD/CAD. AUD pairs are perfectly aligned and deeply overbought for the week. AUD/JPY’s 5 year average is located at 79.79. AUD/CAD 10 year average is located just above at 0.9805 while AUD/USD is found at 0.7289.
NZD/USD is well supported at 0.6903 and 0.6820. The next big line is located at 0.7264. NZD/JPY do or die next average lines are located at 74.03 and 74.65. NZD/CAD as top pair is overbought yet 5 year is found at 0.8979.
NZD driver pairs are NZD/CAD top pair and NZD/CHF as bottom most currency pair bot only for NZD but in a 64 pair lineup to include EM’s.
GBP/USD Vs USD/CAD dividing line is located at 1.3185 and USD/CAD’s 5 year at 1.3177.
Oversold USD/JPY next big lines below are 103.03 and 102.38. Intervention by the BOJ to rescue a falling JPY? Central banks rarely intervene in the modern day, particularly on a large scale. Intervention since 2016 is done through daily changes to interest rates. Its the best, easiest, guaranteed and no cost approach to adjust exchange rates.