DXY achieved 106.82 highs yesterday and 106.82 was located from 106.94 to 106.52 as written Sunday. As DXY achieved weekly highs, EUR, GBP, AUD and NZD dropped. USD/JPY and JPY cross pairs jumped higher from DXY 105.05 lows. DXY for the week traded its usual 177 pips and inside the 200 pip ranges.

The BOE raised 25 points June 16 and GBP traded higher on both June 15 and June 15. The RBA raised and AUD/USD dropped. The RBNZ raised July 13 and NZD/USD traded higher but dropped April 13th on the last raise. EUR/USD traded higher when the ECB raised. USD/CHF dropped om the SNB raise.

When markets shifted in 1972 from Gold and 1% Bretton Woods ranges to interest rates, nobody had a clue what to do nor how how to trade. Bid and Ask spreads to interest rates went ballistic and out of control. Interest rate dealers profited far more than their fair share and knocked market prices off kilter.

When markets finally rightsized, the moving average and interest rates to current traded markets was born and became a permanent fixture since 1972. The moving average is vital today for trades but the moving average must be correct. A chart average is not correct. Add the CMT Association to the long list of criminals and non credible traders today. What a colossal waste of time.

GBP/USD and GBP cross pairs are traded today as long when oversold and short when the price becomes overbought. The moving average informs what to do. GBP/JPY’s big break for lower is located at 162.17. GBP/JPY trades current 163.40’s. Short is the trade.

GBP/USD tops are located at 1.2197, 1.2214 and 1.2233. Lows and long are found at 1.2072 and 1.2063. GBP/USD for the past 24 hour trades, achieved 1.2128 to 1.2175 or 47 pips.

What is traded today is a tiny portion inside the larger range from 1.2174 to 1.2009. No mystery to highs at 1.2175.

Whatever the BOE decides, GBP/USD is expected to normal 50 ish pips. But this is GBP as GBP/USD maybe a middle currency pair but its assigned larger ranges than AUD/USD and EUR/USD. This explains GBP/USD’s ability to trade absolute dead or go ballistic. Its the typical skitzo nature imbedded in GBP.

For interested, see Ron Paul and Lew Lehrman a Case for Gold for a fascinating GBP history.

Brian Twomey

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