FX Weekly: G10, EM, SOFR, GOLD, Stock Indices

USD/CAD broke higher last week to trade comfortably above GBP/USD. USD/CAD begins the week not only massively overbought but the 5 year average is located at 1.2971. A break above 1.2971 targets 1.3395.


Overbought USD/CAD sits in contention to overbought CAD/CHF and CAD/JPY. USD/CAD’s overall position is located between GBP/USD and EUR/JPY. USD/CAD continues its months long status as problem currency and earns its place in the bottom portion to overall rankings among 22 currency pairs.


As written May 24, DXY above must break 102.26, 102.94 then 103.23, below 101.62 then 100.81. DXY lifted last week from 101.81 supports to break 103.23 and traded to 104.24. DXY bottom support now sits at 103.00’s and next target is located at 104.82 and just ahead of massive overbought at 105.00’s. DXY shorts for the week is the best trade and complies to USD/CAD’s overbought status.


GBP/JPY achieved long term targets at 168.05 and 168.83. Lows traded to 165.00’s and next stop below is located at 163.00’s on a break at 164.75.


JPY cross pairs begin the week neutral to overbought against a months long trade plan to short highs as JPY cross pairs remain massive overbought short, medium and long term.


No mystery to an overbought USD/JPY and next target is located at 132.11.

  USD V EM

USD/BRL big day Friday for the Real to break above 4.9663 and trade to 5.0120. BRL is well supported at 4.9663, 4.9459 then 4.8818. Next target is located at 5.04 easily.


USD/DKK from 7.0714 begins the week massive overbought and targets shorts to 7.0045. A break below 6.9925 is required to target 6.9450. Overall, USD/DKK is held by 6.8855 to target a larger move lower to 6.8558.


USD/HUF sits in the same massive overbought position as USD/DKK. From 378.31, USD/HUF targets 370.15 then 369.33 easily.


USD/MYR from 4.40 targets 3.3829.


USD/PLN overbought to target 4.3464. Overall supports are located at 4.3317, 4.3277 and 4.2752. USD/PLN sits overbought short, medium and long term.


USD/RON overbought targets 4.6547 from 4.6991. USD/RON sits overbought from the 5 day average to 4000 day.


USD/TRY at richter scale overbought targets 16.8115.


SOFR: Secured Overnight Funding Rate


The new SOFR rate is pretty much the driver to the Fed’s interest rate system as 1 trillion of transactions run through SOFR daily. The current top rate trades 0.95 since May 17 while the bottom rate fluctuates from 0.65 lows to 0.73. The 30 day average is reported at 0.7829 and 90 day at 0.47. The break higher from the low side is located at rates from 0.80, 0.8250, 0.8398. The 180 day rate is reported at 0.2608 however first break line is found at 0.3695.


G10 Trades


Best trade opportunities are found in short USD and long anchor pairs: EUR/USD, GBP/USD, AUD/USD and NZD/USD. Best cross pair trades are found within EUR/CAD and GBP/CAD. CAD/CHF is the better trade to AUD/CHF and NZD/CHF. AUD/CHF is the better trade to NZD/CHF. Nothing exciting to EUR/AUD and GBP/AUD as both trade from the exact same position for each of the past 3 weeks.


XAU/EUR and XAU/USD


The difference between Gold in Euros and USD is the market number. XAU/EUR trades 1700’s while XAU/USD trades 1800’s. Both are the exact same instrument and trade the exact same as Gold is the driver.


While XAU/USD targets a solid line of resistance at 1888.53 and 1889.20, XAU/EUR targets higher at 1751.09 and 1798.17.


XAU/EUR is the driver pair for the week and should outperform XAU/USD by a few points but not much.


Silver priced in Euros as XAG/EUR or USD as XAG/USD is not worth a vew nor trade efforts.


SPX, NASDAQ, DOW Jones


SPX higher must break 3937.74 then 4034.89. NASDAQ first break higher is located at 11452.32 then 11797.18. Dow Jones above 31723.94 trades between 31723.94 to 32314.86 as next break line. Dow Jones potential is trade 2 and 300 points per day and roughly 1000 points per week.

Brian Twomey

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