Currency cross rates as exchange rates are constructed by 2 currencies and generally from 2 opposite currencies such as EUR/USD and USD/ CAD to combine EUR/CAD. EUR is the risk side as EUR/USD while USD/CAD represents the USD side as opposite. Either EUR/USD or USD/CAD as anchor currency pairs are the main drivers to EUR/CAD prices.
The premiere indicator for price drivers are correlations because correlations provide mathematical proof to anchor pair drivers and Correlation answers many questions such as is EUR in control of its cross pairs, is a double trade located as EUR/USD and EUR/CAD or USD/CAD and EUR/CAD. Are currency markets trading in a risk on mode or favor USD as non risk.
Vitally important because markets trading as risk on mode by EUR/USD and EUR/CAD positive Correlations contain wider ranges and more profit potential than USD/CAD and EUR/CAD.
Correlations never disappear from markets and its impossible to leave currency pairs as a Correlational determination must always exist and found by moving averages. A Correlation is the hidden number from 1.0 to -1.0 and flows in and out of currency prices.
JPY cross pair correlations to USD/JPY relinquished control in favor of anchor pairs such as EUR/JPY to EUR/USD, AUD/JPY to AUD/USD. EUR/USD and AUD/USD are rightful owners to EUR/JPY and AUD/JPY so the universe of cross pairs are correctly trading as one unit.
USD/JPY as an insurgent currency commits a treasonous act to subvert EUR/JPY to its positive correlation side.
USD/CAD’s long held standing as positive Correlations to CAD cross pairs are now gone as Correlations shifted to EUR/USD and EUR/CAD +85%, AUD/USD and AUD/CAD +86%, GBP/USD and GBP/CAD +82%, NZD/USD and NZD/CAD +96%.
How strong is the shift. USD/CAD Vs GBP/CAD -58%, USD/CAD Vs EUR/CAD -64%, USD/CAD Vs AUD/CAD -66%, USD/CAD Vs NZD/CAD -90%. The Correlational shift is solid as a rock.
Currency markets are experiencing massive changes by Correlational shifts as cross pairs retain its rightful position to original anchor pair owners. The FX word for Correlational shifts is Realignment as the first side of the exchange rate re aligns from subversives to rightful owners.
Early warning signs to Correlational shifts are range and price noise vs variation problems to cross pairs. Current offenders are GBP/CAD, GBP/NZD, AUD/NZD, EUR/AUD, GBP/AUD, USD/CHF and EUR/GBP.
Long term trade forecasts hold for 3 to 4 and 5 ish months. Depends on movements.
USD/CAD oversold supports below are located at 1.2840 and 1.2853. USD/CAD at 1.2900’s contains just ahead the 5 year average at 1.3034. Break at 1.3034 longer term targets 1.3465.
The problem with a 1.3034 break is GBP/USD at 1.3200’s is not close to its 5 year average break at 1.3111 and USD/CAD is overbought from longer dated averages from 1.2600;s and 1.2300’s.
Any price above 1.2893 is open to shorts to eventual break at 1.2850 and 1.2840 to target 1.2738.
Nothing happening to USD/CAD long term and no brainer trades. USD/CAD serves its current purpose as day and weekly trades.
EUR/CAD trades a range from 1.4482, 1.4523 to 1.4628, 1.4663 and 1.4696. Massive hurdles continue as next above at 1.4724, 1.4860 then 1.4910.
Long term target trades fails to exist. Best trades are daily and weekly. The only positive is if EUR/USD travels higher then EUR/CAD trades follows.
Weekly trade: short 1.4667 and 1.4677 to target 1.4599. The weekly entry coincides perfectly to day trade tops at 1.4656.
GBP/CAD trades from 1.7047 to 1.7131. Above 1.7131 becomes 1.7131 to 1.7229 and 1.7241. Below 1.7131 targets 1.7070. Below 1.7047 targets 1.6955. GBP/CAD is least favored to all CAD trades offered today.
AUD/CAD is the top exchange rate pair to the AUD universe and AUD/CHF at bottom while AUD/USD and AUD/JPY are middle currency pairs and trade between AUD/CHF and AUD/CAD.
AUD/CAD hurdles are located at 0.9193, 0.9312 and 0.9446. Above 0.9312 targets 0.9376. Above 0.9446 targets 0.9602. AUD/CAD’s overall target is 0.9376 and a long drop trade strategy. A long drop strategy informs AUD/USD higher. AUD/CAD is the best of the CAD trades.
NZD/CAD lacks any ability to long term trades. The lineup as follows: 0.8690, 0.8740, 0.8794, and 0.8866. Current NZD/CAD trades on the verge of 0.8740 at a do or die inflection point. Above 0.8740 targets 0.8790, below 0.8740 targets 0.8702.
Instead of long term target trades, range trades are the order of the day.