FX Weekly: EUR/USD, GBP, CHF, Correlations

Most informed commentary to overall currency markets is cross pairs are now aligned to anchor pairs as AUD/CHF for example is now aligned to AUD/USD by Correlations at +99%, NZD/USD to NZD/CHF +99%. GBP/USD to GBP/CHF +99%, and EUR/USD to EUR/CHF +99%.

USD/CAD is correct and a fairly permanent currency market condition Vs CAD/CHF at -98%. The rarely seen yet great shift to currency pairs is now complete by CHF switch and means the 2nd side of the exchange rate no longer drives, controls and correlates to opposite 2nd sided currencies within an exchange rate.

USD/JPY no longer moves and correlates to JPY cross pairs, USD/CAD no longer moves and correlates to GBP/CAD, USD/CHF no longer moves and correlates to AUD/CHF and 2nd sided CHF in the exchange rate.

EUR/USD, GBP/USD, NZD/USD and AUD/USD now correctly correlates to its own cross pairs within the respective universe. A powerful development as the universe now trades together as one unit and it means ranges expand to create more profit potential.

USD/JPY, USD/CAD and USD/CHF now trade on their own without cross pair assistance and are vulnerable to downside potential and diminished ranges. Beside DXY and trade above vital 95.52, USD currency pairs within the 28 pair universe now reduces to 3 currencies as follows: , GBP/NZD, CHF/JPY, GBP/AUD. CHF/JPY by +90% correlations belongs to USD/JPY while GBP/NZD and GBP/AUD negatively correlate -22% to GBP/USD.

USD was once the driving force to currency markets as USD/JPY, USD/CAD and USD/CHF correlated to 15 of 28 currency pairs.

USD/JPY begins the week overbought and oversold to USD/CHF and USD/CAD.

Last week’s long trade to target 114.25 and 114.32 traded to 114.50 highs and short target at 113.41 traded to 114.29 lows. Wednesday highs at 114.37 traded to 114.05 lows.
USD/JPY weekly trade in the past 6 weeks achieved +900 ish pips for 6 trades.

Lesson for Traders

All 6 USD/JPY trades achieved upside and downside targets. No requirement existed to watch screens, charts, use stops or concentrate on the latest market news. The market price is matched to the mathematical trade strategy but never a strategy matched to the price as this never works.

A traders final destination is click on Sunday and exit by Friday without regards to price movements. This allows a trader to live life outside markets. Clearly a hard concept to grasp as most traders watch screens all day and don’t know or trust the price.

USD/JPY this week targets 114.64 and 114.71 then shorts target 113.59.
USD/CHF driving price is located at 0.9337 and targets 0.9168 then 0.9253. Historically and from long term models, USD/CHF lives a constant oversold position year after year.

USD/CAD trades the same weekly story as vital levels are located at 1.2250, 1.2697 and 1.3032. JPY cross pairs for the week are overbought to include richter scale overbought CHF/JPY.


GBP/USD traded 1.3437 highs last week and prior to reported 1.3445 and 1.3464. Vital levels this week are located at 1.3160, 1.3357, 1.3441 and 1.3459.
Concentration this week are favored GBP pairs as GBP/USD, GBP/JPY and GBP/CHF.


Longer dated averages remain deeply oversold .and targets 1.1423, 1.1438 and 1.1442 and just ahead of vital break for higher at 1.1451. The downside target is now 1.1049 and 8 pips higher from last week as bottom averages are rising to explain EUR/USD’s neutrality at 1.1300’s. EUR/USD 1.1277 must break to sustain a downside move.


Same position holds as 95.52 to 97.16 and DXY tops at 98.00’s and 99.00’s.
Overall, currency markets this week are heading for range conditions without dramatic price moves.

Brian Twomey

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