FX Weekly: EUR, DXY, JPY, AUD, NZD

The question to AUD/USD is what’s the problem. AUD/USD over the past 5 days traded between 61 and 120 daily pips. Wednesday and Friday were best days at 100 and 120 pips. Monday, Tuesday and Thursday AUD/USD 87, 61 and 58 pips.


AUD/USD last week managed to break higher last Wednesday at vital 0.6971 and traded 60 pips to 0.7031. AUD/USD 60 of the 100 pip day on Wednesday was covered. AUD/USD Friday broke below 0.6993 and traded 81 pips to 0.6912.


AUD/USD assistance higher was derived from an oversold EUR/AUD and a 300 pip drop from 1.4800’s to 1.4500’s to trade deeper degrees of oversold.


AUD/USD trades its best days and best movements when AUD is in agreement to AUD/EUR. AUD/EUR all last week traded overbought then to a higher degree of overbought from the EUR/AUD drop.


Instead of a meaningful correction to AUD/USD, higher was the only option. AUD/EUR remains massively overbought against a deeply oversold EUR/AUD.


AUD/USD’s best days traded last week as a result of vital MA breaks while the 3 dead days was AUD/USD caught between the AUD/EUR and EUR/AUD crossfire. The crossfire left AUD/USD paralyzed to movements.


AUD/USD closed at 0.6986 against most vital 0.6993. The AUD/USD break last week on Wednesday at 0.6971 corresponded to USD/CAD break below 1.2875. AUD/USD and USD/CAD were the first and only currencies among the USD V Non USD to break significant averages.


AUD/USD vs the AUD universe trades as oversold AUD/CHF, Neutral to AUD/JPY, Neutral to oversold AUD/CAD and overbought AUD/NZD. Overbought AUD/NZD informs lower AUD/CAD as AUD/NZD is the same exact currency as AUD/CAD only shown in the reciprocal format to exchange rates.


Overbought AUD/NZD and AUD/EUR are the driver pairs this week to AUD/USD. AUD/USD contains 2 options this week. Above 0.6993 targets higher at 0.7080’s or longs from 0.6887 to 0.6913.


Overall, AUD/USD sits last on the 20 trade rank list specifically due to dead ranges from small movements last week. Better trades exist.


The Week


DXY


As written last week, DXY targets 105.69 at the lows. DXY traded to 105.61 and ranged its 200 pips from 107 to 105.00’s. DXY this week will trade the same 200 pip ranges from 107.00’s to 105.00’s.


DXY averages above are building to prevent 107.00’s to trade. Vital points are located at 106.10, 106.52 and 106.94. Break at 105.47 targets 105.15 then long.


As DXY trades lower then more averages will build against DXY higher but most important, against all USD from trading higher. DXY lower is positive to long EUR/USD, GBP/USD, AUD/USD and NZD/USD.


DXY will eventually break 105.00’s to then trade 105.00’s to 103.00’s. Next week appears as most opportune time.


Respectful advice is never dismiss DXY from overall forecasts as DXY is a vital currency and commentary to overall markets. DXY 200 pip ranges informs market will remain stable and trade fairly normal moves for months in the future.


DXY averages building against higher levels coincides to EUR/USD seasonality from June to November/ December. EUR/USD seasonality means EUR/USD trades its highest yearly levels during the June to November/ December period.


EUR/USD V USD/JPY


EUR/USD big break for higher is located at 1.0429 Vs USD/JPY at 132.38. USD/JPY is within 81 pips to its vital break and target at 129.00’s. DXY averages, EUR/USD seasonality and lower USD overall will assist USD/JPY to the 132 break.


JPY Cross Pairs


EUR/JPY and CAD/JPY are only 2 currencies with fairly clear trade signals this week. AUD/JPY, NZD/JPY and GBP/JPY sit last to trade rankings. All JPY cross pairs site neutral to oversold against extremely wide ranges. Shorts are best trades.


NZD


NZD/USD and NZD currencies overall are better trades than AUD as NZD sits in good positions and to long any drops. This means long NZD/CHF, NZD/USD and NZD/CAD. Caution to NZD/JPY.


GBP


GBP/USD is in decent shape to match NZD. Favored trades this week are GBP/USD, GBP/CAD, GBP/AUD, GBP/CHF. Dead last are GBP/NZD due to lack of range and GBP/JPY. Long drops is the preferred trade strategy.


GBP/CAD is a repeat from last week. Recall last week, oversold GBP/CAD recommended long and GBP/CAD traded 200 pips higher.


USD/BGN or the Bulgarian Lev


Big break for lower remains 1.8777. Shorts from 1.9251 and 1.9284 targets 1.9031 on a break of 1.9157.


Trade Rankings


EUR/USD, EUR/JPY, EUR/AUD, EUR/CAD, NZD/USD, USD/CAD, EUR/NZD, AUD/CHF, NZD/CHF, CAD/CHF, AUD/JPY, NZD/JPY, CAD/JPY, AUD/USD.


Overall best: EUR/USD, EUR/JPY, EUR/AUD, EUR/CAD, NZD/USD, USD/CAD, EUR/NZD.


AUD/CHF, NZD/CHF and CAD/CHF are always good for quick and easy pips and guaranteed pips but all remain last every week due to slim ranges.

Brian Twomey

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