As written in FX commentary Sunday , USD/JPY fails to break 107.58 then targets 108.95 easily. USD/JPY not only achieved highs at 109.07 but at current prices sit at overbought status.

EUR/USD began the week overbought from the close at 1.2096 and traded to higher overbought status at 1.2115 highs. EUR/USD remains done and overbought.

EUR/JPY from the close at 130.47 rose 119 pips to 131.66 and followed USD/JPY higher.
Drivers to currency markets are USD vs Non USD and the cross pairs follow. Correct is cross pairs must outperform USD Vs non USD counterparts as is their purpose.

EUR/USD, EUR/JPY and USD/JPY all sit at deep overbought to current prices and this relationship must break wide open in order for prices to move again.

The problem lies at vital MA levels at EUR/JPY 128.98, EUR/USD 1.1994 and USD/JPY 107.54. All trade incorrectly above.. Until EUR/USD breaks below 1.1994 or USD/JPY cracks 107.54 then currency markets will maintain ailing status and slow price speeds.

EUR/USD for example correlated to USD/JPY at week’s beginning at -10% and now the relationship is positive at 0.04%. This situation cannot hold as correlations trade beside each other.

USD/JPY shorts today are located at 109.48 and 109.44 to target 108.83 easily then 108.51. Note 108.83 in relation to the weekly target at 108.95. A break at 108.83 is required for a lower USD/JPY.

EUR/USD Any price at or above 1.2068 are short entries to target 1.2019 and 1.2006. A break at 1.2043 is required for EUR/USD lower. Any price above 1.2068 is free money.

EUR/JPY Any price at or above 131.48 are short entries to target 130.64 easily then 130.53. Required is 130.64 to break to target lower levels. Any price above 131.48 is free money. Overall, 128.98 remains a solid line and is matched alongside the 15 year average at 127.83.

As for Powell and the Fed today, whatever Powell says or not says is located inside the price path. Trade the market price is my advice and trades will be just fine. Powell’s words will be measured to address the public so not to move markets.

The concern is not economics but the political system under Democrat control.

Written in January.

As Biden continues where America’s bummner Obama left off in 2016 to advance a bankrupt agenda under obstinate false ideals, the road ahead for America will be fraught with massive spending in the name of climate change and stimulus. And given a Democrat congress for at least Biden’s first two years, Biden must move fast to spend the money as 2022 could see the Democrats gone from congressional majorities.

Biden will ride free and unaccountable to not only spending but the disasters ahead as the wizard won’t be seen nor will he ever have to answer to anybody, particularly the American public. Between the news media and big tech, Biden will be shielded to hold news conferences.

And Correct. The only deviation is Democrats learned how to steal elections by computer manipulations so 2022 is under question to switch to Republican control.

Brian Twomey

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