FX Next Week

DXY traded to 110.78 highs against tops to the 40 and 50 year averages at 110.72 to 111.55. Points 110.72 – 111.55 holds as tops for months to come. DXY tops are driving non USD anchor pairs higher such as AUD/USD, NZD/USD, EUR/USD and GBP/USD. DXY tops drove USD/CAD 100 pips lower to current 1.3000’s from 1.3200 highs. USD/JPY from reported 144.82 tops now trades 142.00’s.

DXY at current 108.00 crossed below 109.00’s CAD/JPY. On the way higher for DXY to 110.78, EUR/AUD broke above vital 1.4740 to trade 1.4881 highs.

Next FX focus is wide range currencies EUR/AUD, EUR/NZD, GBP/AUD and GBP/NZD.
AUD/USD currently trades 0.6868 Vs AUD/EUR at 0.6749 and EUR/AUD at 1.4815. Last evening at 4:00 pm EST, AUD/USD traded 0.6750 Vs AUD/EUR at 0.6754 and EUR/AUD 1.4807.

As DXY dropped to assist AUD/USD higher, AUD/USD was provided further assistance to cross above AUD/EUR to trade 126 pips higher to 0.6876.

NZD/USD at current 0.6138 competes with NZD/EUR at 0.6081 Vs EUR/NZD at 1.6444 as NZD/USD crossed above NZD/EUR.

EUR/CAD at 1.3124 Vs CAD/EUR 0.7619 to CAD/CHF 0.7379 and CAD/USD 0.7695. Yesterday at 4:00 pm, EUR/CAD 0.7642 Vs USD/CAD 0.7640 and CAD/CHF 0.7414. Actual at 4 yesterday, USD/CAD 1.3090 Vs EUR/CAD 1.3085.

CAD/GBP at 0.6623 trades above NZD/GBP at 0.5286 and AUD/GBP at 0.5909.

Next Week

DXY at 108.00’s Vs EUR/USD at 1.0000’s and parity offers roughly an 800 pip spread and down from 1100 at week’s beginning. Despite DXY at extreme 50 year highs and judged by wide range currency reciprocals, moves won’t see violent up and down swings but rather fairly normal movements.

EUR/USD is expected a close in the vicinity of 1.0052 to range next week from 0.9944 to 1.0085. EUR/USD big break for higher prices is now 1.0225. Targets next week then become 1.0154.

USD/JPY target and big break is located at 141.11. USD/JPY must break 135.00’s for a deeper move lower.

JPY cross pairs trade severely overbought but must break for GBP/JPY is found at 162.47 and EUR/JPY at 138.59 while CAD/JPY is held higher by 104.00’s, AUD/JPY at 93.00’s and NZD/JPY 84.00’s.

Next week to short JPY cross pairs targets EUR/JPY 140’ss and GBP/JPY easily 163.00’s.
USD/CAD most vital is located at 1.2958 and targets 1.2834. USD/CAD broke below the 5 year average at 1.2980. DXY lower then targets USD/CAD at 400 pips from the 5 year average at 1.2563. Lower USD/CAD and DXY challenges EUR/CAD big break at 1.3245.

GBP/USD trades 1.1574 to 1.1783 in wide ranges.

Severely overbought EUR/NZD for lower must clear 1.6338 and not much to changes since last week. Overbought EUR/NZD continues its wide divergence to oversold GBP/NZD.

GBP/CHF at 1.1200’s trades a lifetime low never seen before in 69 years of trade since 1953. GBP/CHF at the 2008 crash traded 1.9948 and dropped 8700 pips or 600 pips per year.

Brian Twomey

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