The major problem to EUR/USD was seen from 40 and 50 year monthly averages but specifically the insight derives from day trades.

Top Side EUR/USD for today. 1.0147, 1.0153, 1.0159, 1.0166, 1.0172, 1.0179, 1.0185, 1.0192

Looks like yesterday? EUR/USD at a paltry 50 pips per day trades 6 and 7 pip spreads. This decreased spread is most compressed and never seen before.

Typical EUR/USD in past years dating to 10 and 18 years ago traded 75, 80 and 90 pips per day. This means EUR/USD spread 9, and 10 pips as follows based on today’s trade.
Topside: 1.0150, 1.0159, 1.0168, 1.0178, 1.0197, 1.0207, 1.0216.

At 50 pips offers roughly 100 pips per day assuming EUR/USD trades a full range Vs 80 pips per day at 160 pips. The central banks chopped off 60 ish pips per day to trade.
Opposite EUR/USD is DXY at 55 pips or 7 pips as follows for today’s topside: 108.07, 108.14, 108.21, 108.28, 108.35, 108.42, 108.49, 108.56.

DXY and EUR/USD has been trading 50 pip days for the last years. And this won’t change much in years to come.

GBP/USD Topside: 1.1719, 1.1726, 1.1733, 1.1741, 1.1748, 1.1756, 1.1763, 1.1771.
GBP at 7 and 8 pips trades its most compressed spread in many years.

Compare GBP/USD to its opposite USD/CAD. Topside as follows: 1.2989, 1.2997, 1.3005, 1.3014, 1.3022, 1.3030, 1.3038, 1.3047.

USD/CAD is trading rare days compared to GBP/USD by spreading 8 and 9 pips vs GBP/USD at 7 and 8 pips. Normally GBP/USD beats CAD by trading more pips per day.
GBP/USD yesterday traded 110 pips vs USD/CAD 82. This is typical in the GBP/USD and USD/CAD relationship. DXY traded 103 pips. Also common on any trade day.

AUD/USD and NZD/USD: The Constants

AUD/USD Topside today: 0.6879, 0.6883, 0.6887, 0.6892, 0.6896, 0.6901, 0.6895, 0.6910
AUD at 4 and 5 pips holds constant in past decades and will hold exactly in decades to come.

NZD/USD topside for today: 0.6134, 0.6137, 0.6141, 0.6145, 0.6149, 0.6153,0.6157, 0.6161

NZD 4 pips is also a constant. NZD never changed from past decades nor will ever change in decades to come.


Now we arrive at constant change. USD/JPY traded from 59 daily pips to 72 and spreads 9 pips to beat EUR, GBP, AUD, NZD and CAD. For USD/JPY at 9 pips is extraordinary as I don’t remember 9 pips ever seen before.

Topside for today: 142.29, 142.38, 142.47, 142.56, 142.64, 142.74, 142.83, 142.92

USD/JPY should trade 50 pips to match EUR/USD and DXY. USD/JPY is the outlier to today’s markets but not an outlier compared to JPY cross pairs.

EUR/JPY Topside today: 144.30, 144.39, 144.48, 144.57, 144.66, 144.75, 144.84, 144.94
EUR/JPY matches USD/JPY exactly at 9 pips.

GBP/JPY however is the driving force to USD/JPY and JPY cross pairs as GBP/JPY trades 10 and 11 pip spreads. GBP/JPY must trade more pips than USD/JPY and JPY cross pairs as designed and never changed in past decades nor will ever change in decades to come.

Topside today. 166. $$, 166.77, 166.87, 166.98, 167.08, 167.19, 167.29, 167.40.
Currency pair pips and ranges contains a chain of command inside their own built in structure. Each pair was designed with their own ranges and spreads.

Every financial instrument on the planet operates exactly as currency pairs to pip spreads and ranges.

SPX for example is fairly constant at 20 points which means spreads at 5 points. Stock indices and commodities were designed to underperform currencies especially DXY. This is a constant to markets.

SPX yesterday traded 33 points to DXY 108 or 1/3.

GOLD for example is also fairly constant at 9 pips and 3 pip spreads.

WTI Oil and Brent trade 3 and 5 points per day or 1 and 2 point spreads.

Required is know the simple interest rate procedure then count on your fingers or use a calculator to factor day trades.

Brian Twomey

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