Non Normal Currency Markets: 5, 10, 15 Year Averages

Last year, EUR/USD began a short period to lead currency prices by the first currency to break above its 5 year average at 1.1400’s. Then remaining 27 currency pairs adjusted to trade above own respective 5 and 10 year averages. Markets then offered oversold traded to oversold and overbought traded to overbought.

Prior to the EUR/USD break at the 5 year average, markets traded perfectly normal for 2018 and 2019 as all currency pairs traded below 5 year averages. Markets were normal and uniform and all currency pairs were in sync with each other.

The only exception was GBP/USD to trade straight to 1.1900’s without any corrections. It was the only pair off kilter and the reason was the rare day to trade the 9 year currency cycle. GBP/USD had to complete the 9 year currency cycle at 1.1900’s.

Markets for the past few months traded again perfectly normal. However now we are in a period again when 5, 10 and 15 year averages either broke or threatens to break. This explains current markets trading oversold to more oversold and overbought prices traded to more overbought.

Non normal are markets trading oversold to more oversold and overbought to more overbought. We don’t see this often yet it happens, rarely over years but yet it occurs.

Early warning to oversold to oversold and overbought are not only the 5, 10 and 15 year levels but problems to exist inside the price by measure of Noise and problems to ranges. When wide range currency pairs expeience noise problems, then all know, something exists to a market change to trade non normal markets.

Wide range EM currencies also offer an insight. Vast majority of NZD/EM currencies this week were overbought while CAD/EM were oversold and GBP/EM were fairly neutral. Deeply overbought USD/CAD traded higher, deeply oversold NZD/USD traded lower and nothing special to GBP/USD.

Deeply oversold AUD/USD just broke its 5 year average at 0.7322 and explains oversold to more oversold and no correction in sight. NZD/USD at massive oversold just broke its 5 year average at 0.6856. Explains massive overbought to associated pairs to AUD and NZD.

By memory as I haven’t viewed the question to how long can this 5, 10 and 15 year average period last. Easily weeks to recall. But it will depend on the speed to accomplish the intended breaks. And if the actual breaksa occur.

Market entered a highly dangerous period with an unknown duration. Until or unless breaks are seen then trade strategy remains to short USD and long non USD such as EUR/USD, GBP/USD, AUD and NZD.

For USD, best trade as usual is USD/CAD. Canada is the last holdout to normal markets and normal interest rates. The remainder nations entered control of interest rates to murder currency price movements. DXY is no different as Fed interest rates turned into a massive joke played upon markets and movements as rates don’t move.

Why to stand clear USD/JPY due to BOJ and Fed rates. Both are turning USD/JPY into a bad joke to movements. Same for USD/CHF by the SNB and FED.

Anyone truly interested, view the SNB’s Debt Register Claims and overniight Tom Next rates. Viewed will see again a massive joke to USD/CHF movements. A long article was written on fxstreet and my blog to know and understand the SNB’s Debt Register Claims for interested. For interested as all will enter the deep seated functioning to the currency price and specifically to USD/CHF.

As written, RBNZ interest rates are to high. RBNZ rates took a giant dive overnight. A raise for the RBNZ was literally impossible.

Respectfully, its been 5 years to trade day trades by interest rates. I’m inside central bank interest rates daily and most times twice daily everyday for 5 years. Its imperative to trade day trades by interest rates for perfection so I must know daily interest rates. And I know all nations extremely well.

5, 10 and 15 year Averages.

EUR/JPY 127.10, 15 year average.
EUR/USD 1.1465, 5 year average.
AUD/USD 0.7322, 5 year average.

NZD/USD 0.6856, 5 year average.
GBP/JPY 149.33, 10 year average.
AUD/JPY 79.98, 5 year average

NZD/JPY 74.88, 5 year average, 76.11, 10 year average, 73.56, 15 year average.
GBP/CHF 1.2611, 5 year average.
EUR/CAD 1.4978, 5 year average, 1.4548, 15 year average. No changes since last posted. Stand clear.

GBP/CAD 1.7383, 15 year average, 1.7262, 10 year average.
NZD/CAD 0.8809, 10 year average, 0.8956, 5 year average
EUR/NZD 1.7425, 15 year average, 1.6751, 5 year average.

GBP/NZD 1.9615, 10 year average, 2.0818, 15 year average.
AUD/NZD 1.0678, 5 year average.
USD/CAD 1.3076, 5 year average.

EUR/AUD 1.5690, 5 year average.
CAD/CHF 0.7399, 5 year average. And = USD/CAD 1.3515

USD/CHF 0.9528, 10 year average.
EUR/GBP 0.8405, 10 year average, 0.8787, 5 year average.

CAD/JPY 86.33, 10 year average, 83.60, 5 year average, 87.39, 15 year average.
USD/JPY 109.21, 5 year average

Pairs not listed are under no threat to major average breaks.

Brian Twomey

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