FX Weekly: EUR,GOLD, DXY, JPY, GBP, SPX, WTI

EUR/USD broke below its 5 year average at 1.1500’s last November and traded to its 1.0800 target. For the past 3 months, EUR/USD ranged 700 pips from 1.1000 to lows 1.0300’s and 400 pips for the past 2 months. Since the 1.0800 target, EUR/USD failed to break significant averages to trend higher but instead is trading inside a 400 pips range without direction or purpose.


The EUR/USD example describes AUD/USD from the break lower at its 5 year average at 0.7200’s to trade 400 pips from 0.6800’s to 0.7200’s, NZD/USD from the break at 0.6800’s to trade a 300 pips range from 0.6200’s to 0.6500’s and GBP/USD’s 1.3100 break at the 5 year average to trade a 700 pip range from 1.1900’s to 1.2600’s.


GBP/JPY fell 800 pips from 168.00’s but failed to break a significant average. USD/JPY and JPY cross pairs fall into the same category to trade wide ranges without significant breaks to major averages.


Wide range currencies EUR/AUD, GBP/AUD, EUR/NZD, GBP/NZD are caught in the crossfire and trade as anchor pairs dictate. All trade 700 pip ranges in the past 2 months.


The drivers to our currency pairs are the front curve currencies within the universe. GBP/CHF, GBP/USD and GBP/JPY are not only trading extraordinarily wide wide daily ranges but all prevent wide range currencies to move significantly and to break significant averages.


EUR/CHF, EUR/USD and EUR/JPY are also trading wide daily ranges to prevent EUR/CAD, EUR/AUD and EUR/NZD from significant movements. AUD/CHF, AUD/USD and AUD/JPY matches the same concepts as EUR by NZD as NZD/CHF, NZD/USD and NZD/JPY.


Overall, Its extraordinary for GBP/USD and EUR/USD for example to trade 3 and 400 pips days. In the old days of pre 2016, currencies regularly traded 3 and 500 pip days. Today’s ranges doubled from 150 and 200 pip weeks over the past 3 years to 400, 500 and 600 pips.


Wider ranges doesn’t indicate abnormal prices and movements as market prices to currencies, stocks and commodities are trading exactly normal. An extremely rare day exists for market prices to trade non normal. The concept almost doesn’t exist.

The only difference today is averages are spread farther apart to allow wider range movements. Targets allow greater profits than normal but entries remain the exact same.


Our specialty over past years was weekly trades and remain just as expert today however day trade profits expanded enormously under wider range movements. Day trade profits today far surpasses weekly trade profits factored against 20 weekly trades to 19 day trades.


Best trades are located in the first 3 currencies of the universe for example as GBP/CHF, GBP/USD and GBP/JPY. Leave middle currencies alone as GBP/CAD, EUR/CAD, AUD/CAD and NZD/CAD.


The Week


EUR/USD
The vital averages driving EUR/USD are 1.0729, 1.1238, 1.1375, 1.1528, 1.1609, 1.1831 and 1.2357. All averages are richter scale oversold. EUR/USD is deeply oversold from the 100 day average to 4000 day.


The only strategy is long and end week target is 1.0677. Then a resolutions is required for 1.0729 to the next trade leg. Longer range targets are located at 1.0896, 1.1084, 1.1187 and 1.1299.


DXY


As written last week, DXY was overbought at 105.00’s and 103.00;s held as supports. DXY traded last week from 105.00’s to 103.00’s. This week, 106.00’s become deeply overbought and targets 102.00’s at the low end.


GBP/JPY


As written last week, GBP/JPY targets 163.00’s on a break at 164.75. Lows achieved 160.00’s. This week targets 162.00’s and GBP/PY’s big break to target lower prices is located at 161.37. Trade strategy is short.


USD/JPY


As written last week, USD/JPY targets 132.11. USD/JPY lows traded to 131.48 from 135.00’s. This week shorts are located around 136.00’s to target easily 133.01 then 130.00’s.


USD/TRY


As written last week, USD/TRY targets 16.8115 and traded to lows at 17.1356 from 17.3906.


USD/DKK


As written last week, from 7.0714 targets shorts to 7.0045. Lows achieved 7.0145 for +700 ish pips.


USD/BRL


As written last week, USD/BRL targets 5.04 from 4.98. Easy trade as not only was target achieved but USD/BRL traded to 5.12 highs.


USD/CAD


USD/CAD broke above the 5 year average at 1.2971 to trade 1.3076 highs or 100 pips. USD/CAD remains deeply overbought and classified as problem status due to lack of range and contention to CAD/JPY and CAD/CHF. Next stop above is located at 1.3180. Driving averages below are located at 1.2969, 1.2863, 1.2832, 1.2765 and 1.2601.


Overall, far better currency pairs exist to trade than USD/CAD. EUR/GBP day trades will profit far more than a weekly USD/CAD trade.


GBP/NZD Vs EUR/NZD


From 2 best wide range currencies among G28, GBP/NZD 1.9335 and EUR/NZD 1.6613 spreads 2700 pips currently from 3600’s. This metric alone informs movements to GBP/NZD and EUR/NZD are fairly dead but it also signifies wider ranges shifted to front currencies GBP/CHF, GBP/USD and GBP/JPY.


The message from GBP/NZD and EUR/NZD is patience as spreads will widen and better trades will materialize when ranges to front currencies compress.


GBP/AUD and EUR/AUD


Neither pair is on the top ranked trade list of 20 weekly currencies. GBP/AUD and EUR/AUD are best served as 24 hour day trades because the day trades are more exact and perfect than weekly trades and because profits are much higher.


EUR/AUD’s big break for lower is located at 1.5072 and EUR/AUD trades above. GBP/AUD ‘s big break average for higher is located at 1.7717 and GBP/AUD trades below. GBP/AUD and EUR/AUD lack uniformity and divergence exists between both.


The better trade is EUR/AUD if it must be traded.


GBP/CHF Vs GBP/USD and EUR/CHF Vs EUR/USD


GBP/CHF 1.1838 Vs GBP/USD 1.2217 and EUR/CHF 1.0188 Vs EUR/USD 1.0492. GBP/CHF and EUR/CHF begin the week richter scale oversold and matches NZD/CHF and AUD/CHF. GBP/USD and EUR/USD rises as GBP/CHF and EUR/CHF trade higher.


XAU/USD and XAU/EUR


As written last week, XAU/USD targets 1888.53 and 1889.20, while XAU/EUR targets higher at 1751.09 and 1798.17. Targets achieved at XAU/USD Highs 1881, XAU/EUR Highs 1791.


XAU/USD for the week targets highs at 1896.18 while XAU/EUR targets 1804.97. Both bottom at XAU/EUR 1717.58 and XAU/USD at 1787.88.


WTI Vs Brent


WTI from the 107 open is oversold and targets higher at 121.57 and 127.53 while Brent targets 123.60 and 128.66.


SPX500


Higher targets are located at 3723.50 and 3889.28. Watch 3739.30 for higher SPX.

10 Year Yield
Next target higher for the week is located at 3.59 then short to target 3.06.

Interest Rates


From this day forward, the Fed’s interest rate curve is overbought. Higher rates means far more overbought

Brian Twomey

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