DXY V EUR/USD and RBNZ V NZD/USD

Current DXY at 96.40 approaches many and massive averages from 97.00’s to 98.00’s. EUR/USD traded to 1.1226 lows while DXY achieved tops at 96.61. Reversals for higher and lower DXY Vs EUR/USD are located at 95.25 DXY and EUR/USD 1.1494. DXY trades within 60 pips to a brick wall.


DXY day trade tops today are located at 96.79,96.91 and 97.04 while EUR/USD bottoms are located at 1.1210, 1.1197, 1.1191 and 1.1177.


On a reversal higher EUR/USD tops are located at 1.1262 and 1.1291 Vs DXY bottoms at 96.30. 96.18 and 96.06. DXY 96.06 bottom should match close to EUR/USD at 1.1262 and 1.1291.


EUR/USD sits currently deeply oversold. EUR/USD began the week massive oversold.


GBP/USD at current 1.3300’s trades within 200 pips to its 5 year average at 1.3101 while USD/CAD at 1.2700’s trades within 300 pips to 1.3043. GBP/USD at current prices sits deeply oversold and overbought USD/CAD.


RBNZ


Probabilities RBNZ raises OCR from 0.50 to 0.75 sits at +43% and 33% to raise from 0.50 to 1.00 while a 80% probability exists to OCR on hold.


The only scenario to possible raise is OCR’s overnight drop from 0.52 to 0.48 or 4 points. However OCR traded from 0.23 to 0.20 throughout the month of September. A raise was signaled not by OCR but by the 30 day rate while today’s non movement to interest rates and yields provides no warning to possible OCR movements. We’re on the side of on hold.


NZD/USD and NZD/CAD


NZD/USD approaches its 5 year average at 0.6846. To consider a possible break lower, NZD/USD must first trade below 0.6888 and 0.6840 then 0.6779 and 0.6744. Above is located 0.6932 to range from 0.6932 to 0.7048 and 0.7051.


NZD/USD’s problem to ranges is both NZD/USD and NZD/JPY trade above 5 year averages while NZD/CHF and NZD/CAD trade below. NZD lacks uniformity. Either NZD/USD breaks below 0.6846 and NZD/JPY at 76.57 or NZD/CHF trades above 0.6596 and NZD/CAD 0.8919.


NZD’s main problem is NZD/CAD as it trades between 2 giant points from 0.8829 to 0.8919 or 90 pips. NZD/CAD’s price path is found by 0.8817, 0.8826, 0.8829 then 0.8869.


Watch NZD/JPY at 79.43 for lower prices.


Until NZD/USD and NZD cross pairs right size to trade in proper locations then NZD will continue to trade as a problem currency and best to avoid as better and more profitable trades exist.

Brian Twomey

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