Day Trade History, AUD/USD and NZD/USD

The difference between day trades from the 1972 free float to today is zero once interest rate markets were established in about 1975. Took about 3 years because they didn’t have a clue what they were doing to a newly created market and then the question how would interest rates connect to currency prices. Frankel from Harvard wrote the definitive 1975 paper.


The only difference from 1`972 to today is the range but the set up is the exact same and applies to not only every currency on the planet but to stocks, bonds, yields, commodities.


Ranges from 1975 to today changed drastically. Today’s day trades post 2016 requires a strong strategy because central banks limited ranges and profit potential to bare minimums while pre 2016 ranges were much wider and profits were much larger.


The entire system of currency and market prices is Fixed, not rigged but fixed from 1972 to 2021 and long into the future. Know this concept: levels, ranges and targets. The system is Fixed by mathematics but simple math and by interest rates. Both fit hand to glove perfectly.


Ask this question. How does every platform on the planet know where prices start and stop. The answer is platforms are Fixed every trading day so only slight differences exists to daily currency and market prices because only slight differences exist to interest rates and mathematics.


The BOE informed in 2010, we will limit volatility and by 2014, the ECB embarked on a 2 year study to re vamp interest rates. Central banks traveled a long way since 1972 and Frankel’s 1975 paper.


The RBNZ raised interest rates by a full 25 points. What bearing did a 25 point raise have on NZD/USD. Zero. What if the RBNZ lowered by 25 point. Zero effects. The headline interest rate is the most worthless rate on the planet as it doesn’t move the currency price except to trade the announcement then 2 minutes later, its over and NZD/USD trades back to normal.


Compare NZD prices today to an interest rate raise. Did we know the RBNZ changed rates. The Fed insults our intelligence by reporting raise in 2022, 2025 2050.


Here’s RBNZ rates today. 0.67, 0.73, 0.80, 1.54, 2.01, 2.31 and 2.52. I will throw in the 10 to 2 year spread at 0.48 because the RBNZ loves this rate. Fed rates run from 0.05 to the 10 year yield at 1.55. The difference between Fed and RBNZ rates to today’s NZD/USD day trades? Nothing, zero, nada. Its the same old thing every trade day. Its all Fixed.

We’re actually moving on from interest rates to trade by counting on fingers. This is what markets are reduced to, simple counting.


Here’s the NZD/USD joke for today played on traders and markets by central bank comedians.
0.7127, 0.7136, 0.7141, 0.7145, 0.7148, 0.7168, 0.7173, 0.7182, 0.7186, 0.7191, 0.7196 and 0.7201. See volatility. Of course not.


Extract 5 vital numbers: 0.7127, 0.7141, 0.7148, 0.7182, 0.7201. See 0.7141 and 0.7148. Now all see NZD/USD’s relationship to USD/NZD or 3 pip differential. Central banks extracted day trades from markets or at least offered a tough way tio make a living.


Explains why we moved on long ago to perfect weekly and long term trades as those trades are much easier and profits much greater than day trades. Day trades are used for extra profits added to weekly trades.


Where will NZD/USD trade for the next 5 hours. In mid range where no trade exists but this is where the strong strategy comes in because central banks limited movements. The knowledge of the currency price and movements must garner a greater understanding to profit.


RBA preview


GDP yesterday and tomorrow. Taper, 3 year bond, raise OCR 2033, 2050, infinity, never. So far no money was earned, nor a trade or direction, nor rhyme nor reason.


AUD/USD


The RBA sees traders coming and here is the dilemma. AUD/USD big break is located at 0.7460. Not a great time to trade RBA as usual. Normally AUD/USD is mid range and without an RBA trade. Now we have a vital point.


AUD/USD Day Trade


0.7436, 0.7445,0.7455, 0.7462, 0.7470, 0.7478, 0.7483, 0.7488, 0.7493, 0.7502, 0.7507 and 0.7512.
On a larger scale, Overbought begins at 0.7533 and short is the way.


Depending on today’s trading, above points may or may not adjust for RBA but only by a few pips.
The actual trade. We will know exactly long before RBA.

Brian Twomey