The RBA raised OCR by 50 points and AUD/USD dropped 56 pips or almost 1 pip per 50 points. If short from 0.6993 to current 0.6926 lows then all have + 67 pips added to accounts. If short from 0.7047 then + 121 pips added to accounts.

If AUD/USD was oversold then AUD/USD would’ve traded 56 pips higher. The market doesn’t care about Central banks nor raises or drops. The market cares deeply to an average and this drives market prices. A target price is written in Mathematical stone and only Jesus Christ has ability to change this formula.
DXY broke 105.49 and target at 105.15 traded to 105.05.

DXY this week could easily trade to next ranges from 105.00’s to 103.00’s.

Last week EUR/USD range: 1.0302 to 1.0148 or 154 pips. This week 1.0283 to 1.0136 or 147 pips. 2 Weeks ago 1.0309 to 1.0141 or 168 pips.

Overall Ranges, 168, 154, 147. EUR/USD Weekly actually traded 161 pips last week then 206 and 233 pips. EUR/USD beat its weekly ranges by 50 ish pips in 2 of the last 3 weeks. EUR/USD this week traded 9 pips above 1.0283 to 1.0292 then dropped 68 pip to current 1.0215.

What affect did interest rate changes and central bank words and deeds apply to EUR/USD? Nero effect as the market price doesn’t care.

If interest rates effect no changes to market prices, employment as the most lagging indicator available, extracts zero conversations to market prices and much less to overall monetary policy. Inflation achieved 7.5% in January and 6 months later, we’re beginning to hear about major layoffs to big companies. Employment lacks a gauge to Monetary policy.

Th market story however is found in USD/JPY break below 132.38 then trade to lows at 130.38 and almost at our 129.00’s target. Higher for USD/JPY must break 131.98. JPY cross pairs followed USD/JPY as all broke significant averages.

Higher for cross pairs must break GBP/JPY 162.32, EUR/JPY 137.31, AUD/JPY 92.18, NZD/JPY 83.68, CAD/JPY 102.68. GBP/JPY and EUR/JPY trade deep oversold.

CHF/JPY remains the last hold out to break lower at 137.37.

USD/JPY traded 200 pips this week. The 10 Year yield traded 0.17 points and 2 year traded 0.10. The USD/JPY story was never about yields.

Brian Twomey

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