Long Term Targets: 18 Currencies

Overall currency market prices over the past year or so ranged. For the next year, currency market prices will range. Overall ranges for 18 currency pairs experienced a severe trade compression to range boundaries. . When ranges compress, moving averages severely restrict and surround the traded price. Overall, ranges are trading in 2 and 300 pip territories. Vital to the next year or so to trades is monitor moving averages.


EUR/USD Example


EUR/USD bottomed at 1.0300’s and many readers would remember the long term target for EUR/USD was 1.1400’s and 1.1500’s. After a few attempts, EUR/USD achieved 1.1400’s and 1.1500’s. EUR/USD had 2 choices from 1.1500’s.


Either to drop then long again to target 1.1500’s or travel higher inside its respective range. This story applies to all 18 currency pairs and most probably to all 24.


EUR/USD decided to travel higher to 1.2300’s. While EUR/USD traveled higher ever so slowly, moving average supports were built into the price and upon breaks to above resistance points, EUR/USD not only traveled higher but ranges were located at 2 and 300 pip intervals to the bottom MA support and upper resistance point.


Currency prices will move however in intervals of 2 and 300 pips and very slowly. If we don’t see at least 2 and 300 pip moves within current ranges then MA’s will continue to compress and surround to restrict traded prices.


Price moves are quick and very short term and this is seen because medium to long term averages are just not moving. They are actually completely dead.


GBP/USD for example from the Brexit vote drop, its long term averages dropped 1000 pips in 3 and 4 years, from 1.5300’s to current 1.4300’s.


The 18 currency pair mid point for all prices is located at 1.2718 or 0.0127. This is atrocious and low.


Many currency pairs are located at vital inflection points. Overall, we are in a short term do or die situation to move for at least 15 of 18 currencies.


5 and 10 year averages will continue its role as deeply vital.


GBP/NZD, GBP/CHF, GBP/AUD, GBP/USD and GBP/JPY remain the big 5 top movers. By Statistics, GBP/NZD, GBP/CHF and GBP/USD contain 1000 pip moves potentially, GBP/JPY at 900 and GBP/AUD at 700. GBP/AUD ranges dropped severely by at least 300 and 400 pips over the past year. Remainder pair movements are stuck in the 200 to 500 pip category.

                Long term targets

Best strategy to long term targets is GBP/NZD must trade to 1.9107 and 1.9131 from current 1.8995. AUD/CHF must trade to 0.6993 from current 0.6907. GBP/CHF must trade to 1.2450 at least from current 1.2092.


CAD/JPY must trade to at least 82.62.


To exclude the 4 currencies above, 14 currency pairs lack long term targets because nearly all currency pairs achieved long term target destinations. EUR/AUD for example achieved 1.5900’s and 1.5800’s as mentioned in past long term target writings.


EUR/USD


EUR/USD must trade to at least 1.1847 and slightly higher than last week’s 1.1700’s.
Lower must break 1.2020, 1.1998 then 1.1846 to target 1.1700’s and 1.1600’s. Massive MA’s exist at 1.1500’s. EUR top range point is located at 1.2510. I would trade EUR strictly from the short side as 1.2500’s and 1.2600’s are 20 year range tops.


GBP/USD is stuck from 1.3360 to 1.3832. Below 1.3360 lurks the 5 year average at 1.3078 and a solid line at 1.3000 exactly. GBP/USD will drive the cross pairs.


GBP/JPY. Stuck from 144.31 to 139.31, or 500 pips. below 139.31 then a massive line exists at 138.50.


GBP/CAD. Massive supports at 1.7266, 1.7244 and 1.7120. Big break above for higher is located at 1.7533. Nothing special here.


GBP/CHF. Stuck from 1.1952 to 1.2283 however severely oversold.


GBP/NZD break at 1.9145 then ranges from 1.9145 t0 1.9360 or barely 300 pips.
EUR/JPY massive supports at 125.14, 124.99, and the 5 year average at 124.22. Range top located at 128.84. Horrible currency pair.
EUR/NZD. 1.6883 and 1.6923 Vs 1.7236 and 1.7298. EUR/NZD must break 1.7121 to move significantly higher.


EUR/AUD 1.5741 Vs 1.6174 and 1.6205. Well supported at 1.5400’s. Current range top located at 1.5977.


GBP/AUD. Massive resistance at 1.7936, 1.8028, 1.8130 and 1.8169. Must break 1.8380 to move significantly higher. Look for short term targets at 1.7872 and 1.7888. Bottom range point 1.7647.


USD/CAD. Stuck from 1.2386 and 1.2586 to 1.2976 and 1.2993. Massive resistance at 5 year average at 1.3174 and another MA at 1.3177.
CAD/JPY massive lines at 81.38, 83.45, 84.49 and 85.57. Break 80.31 to trade significantly lower. Horrible currency pair.


AUD/USD. Big breaks above at 0.7721 and 0.7841. Below must break 0.7406, 0.7392 and the 5 year average at 0.7290.


AUD/JPY 81.15 and 81.93 Vs 79.76 at the 5 year average then 77.24 and 76.79.


AUD/CHF 0.6770 and 0.6671 vs 0.7063.


NZD/USD. Must break 0.7048 and 0.7020 to travel significantly lower to target averages at 0.6939, 0.6877, the 5 year at 0.6821 then 0.6722.


NZD/JPY. 74.62 at the 5 year average Vs 74.22, 74.15 and 74.07. Break 74.07 then significantly lower to 72.37 and 72.03.


NZD/CHF. 0.6351 and 0.6250 Vs 0.6572 and 0.6733.

Brian Twomey