FX Next Week: EUR, DXY, SPX, WTI

DXY for CPI traded to 102.60 lows and 15 pips from the 102.45 break. DXY then bolted higher to trade to low 104.00’s. USD/JPY hit the DXY lows at 131.00 and traded to 134.00 highs.

DXY was included to overall daily and weekly trades. From 28 currency pairs, USD accounts for at least 15 currencies and under question are middle pairs as EUR/CAD, GBP/CAD, AUD/CAD and NZD/CAD for a total of 19. The definitive answer to verify for inclusion or exclusion is found in Correlations and an easy task to complete.

Overall DXY was contained from 102.00’s to 104.00’s. DXY next week will trade the exact same ranges as this week. DXY to trade lower must break 103.35, 103.22 then 102.46 and 102.37. DXY ranges open to 200 pips on a break of 104.40 to trade 104.00 to 106.00.

The 104 – 106 range is DXY’s best opportunity for market profits as averages align above at every 100 pips from 106.00’s. Overall, DXY 104.40 will hold next week.

Best trade opportunities are found in USD/JPY and GBP/JPY on breaks of 133.77 and 161.16. Massive overbought EUR/JPY will follow GBP/JPY lower as well as AUD/JPY, CAD/JPY and NZD/JPY.
USD/JPY’ target is now 130.89 and 65 pips higher from last week’s 130.24. USD/JPY’s movements are leading JPY cross pairs rather than cross pair leaders to USD/JPY.

GBP/USD broke vital 1.2061 and traded to 1.2269 highs or within this range as written last week: 1.2156 -1.2367. GBP/USD on Wednesday broke below 1.2061 to trade 73 pips to 1.1988.
GBP/USD next week aligns as 1.2057, 1.2166, 1.2269, 1.2372. Slight changes since last week and no change to long only strategies.

EUR/USD 1.0597 and 1.0599 Vs 1.0757, 1.0836 and 1.0915.

USD/CAD to last week’s commentary deserves a correction. USD/CAD over weeks is actually following DXY on a pip for pips basis yet trades `1/2 to USD/JPY. Normal CAD from past years should trade alongside USD/JPY. No changes to USD/CAD trading a pure noise perspective. Overall, USD/CAD is a terrific currency and money maker but CAD has fallen and lacks ability to move.

AUD/USD trades 0.6881 to 0.7009 or 128 pips.

EUR/AUD trades above vital 1.5402 while GBP/AUD trades below its important break point at 1.7524. EUR/AUD and GBP/AUD trade divergent to each other in a severe misalignment. The problem pair is GBP/AUD as GBP/AUD ranges died in comparison to EUR/AUD.

EUR/AUD is clearly the better trade pair while GBP/AUD strategy is continuous from the past 3 weeks to long drops at 1.7300’s. The strategy held everyday this week for 100 pips per trade and many trades over the past 3 weeks. GBP/AUD is caught over the past month between 1.7300’s to 1.7500’s.

EUR/NZD and GBP/NZD trade the same same problem as EUR/AUD and GBP/AUD. EUR/NZD trades massive overbought at 1.7000’s while GBP/NZD trades below vital 1.9170. GBP/NZD as widest range currency pair is the problem as ranges died. EUR/NZD is the better currency to trade.

WTI high side target this week was 81.35 and tops achieved 80.65. SPX high target at 4197 traded to 4159 with 2 trade days remaining.

For Gold, WTI, SPX, VIX and DAX are traded daily and weekly, longs and shorts for continuous profits Sunday to Friday.

Currency markets overall are waiting for DXY to inform if DXY continues a correction higher or continues the downtrend by the break at 102.00’s. The overall trend is much lower and we continue the long EUR and short USD/JPY strategy.

Brian Twomey


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