FX Next Week: Trade Opportunities

EUR/USD for January 2023 is on track to record a positive up month however 8 trade days remain to complete the month. EUR/USD’s 23 year historic scorecard for January factors as 14 down months and 8 months higher. A positive January changes to 14 down and 9 up.


EUR/USD’s track record since 2008 factors as 8 down months to 6 months higher and 2019 ended as a Doji candle. To bank on seasonality as a trade strategy is almost a 50/ 50 proposition however trades for down month profits ran multiple 100’s of pips to result as terrific trades.


The true drivers to currency and all market prices are DXY, interest rates and correct moving averages by Statistics or interest rate moving averages. The difference between a correct average by Statistics and interest rates for day trades is extraordinarily small. Both are the same and generate profits for multiple longs and shorts.


Here’s EUR/USD rates: 1.895 , 1.980, 2.335, 2.878,3.339 and compared to the BOJ and USD/JPY as 1.001, 0.989, 0.930. All day trades and all nation’s interest rates lead to 1.0 parity.


Interest Rates


FED 4.33, ECB STIR, GBP Sonia, CAD Corra & Overnight Money Market Finance Rate, NZD OCR, AUD OCR, BOJ Call rates and CHF Saron, Debt Register Claims and Tom Next or better known as Tomorrow Next. The change to market movements occurred in 2016 as central banks re arranged the interest rate trade formula from free float to hold vital interest rates constant from day to day. Market movements were slashed to almost 1/2 compared to free float interest rates.


From interest rates is derived support and resistance levels as: EURUSD every 6 and 7 pips, GBPUSD every 7 and 8, USDCAD 8 and 9, EURJPY 8 and 9, AUDUSD 4 and 5, NZDUSD 4, GBPJPY 10 to 21, DXY every 6 and 7. EUR/AUD 9, USD/JPY 8 and 9.

Most vital to market prices is very few exchange rates and other financial instrument prices are significant.


Next Week


DXY traded to 101.54 lows this week as last week’s levels held at 102.95 and 103.29. Next week’s vitals are located at 102.73, 103.60, 103.68 and 104.34.


EUR/USD next week trades from 1.0527 to 1.0873 and 1.1100’s. EUR/USD trades a 346 pip range vs last week’s 380 at 1.0486 to 1.0866. EUR/USD ranges are slowly compressing week to week. The final target at 1.1001 holds.


GBP/USD trades 1.2026 to 1.2551. Above 1.2551 targets the previously written level at 1.2700’s.
AUD/USD target from January 9 at 0.7086 traded to 0.7062 highs yesterday. AUD lows January 10 was 0.6859.


AUD/USD trades from 0.6803 to 0.6973 and 0.7131.


NZD/USD from January 9 Final target at 0.6569, NZD traded to 0.6529 highs yesterday. January 12 lows traded 0.6306. NZD/USD overall trades 0.6260 to 0.6464 and 0.6693.


USD/JPY’s final target at 122.00 holds on a break at 125.00. The overall short only strategy remains as we wait for the 125.00 break. Highs this week at 131.00’s was a bonus free money trade.


For this week, GBP/AUD’s big break for higher prices is found at 1.7675 and current oversold below 1.7540. The strategy is long all week from any price at 1.7400’s to target middle to upper 1.7500’s. Continue the strategy all week.


GBP/AUD eventually broke 1.7675 and traded to 1.7900 highs from 1.7400’s.


GBP/AUD trades deeply overbought and ranges are located from 1.7996 to 1.7678. Good target is found at 1.7804.


EUR/AUD must break 1.5474 for lower prices to 1.5300’s.


JPY Cross pairs hold the same short only strategy.


GBP/CAD January range at 1.6068 – 1.6912. held from 1.6100’s to 1.6600’s. The target at 1.6500’s completed yesterday as the vital low at 1.6100’s also held.

Overall markets trade the same as past weeks to 2 and 300 pip ranges.

Brian Twomey