EUR/AUD since December/ January traveled 1200 pips from 1.5200’s to 1.6400’s and April traded 1.6000 to 1.6400’s. AUD/USD since December / January dropped 600 pips from 0.7100’s to 0.6500 then traded 0.6500 to 0.6800’s or 300 pips for March and April. AUD/USD traded 150 pips per month or 7.5 pips per day.
EUR/AUD remains Correlated to EUR/USD at 95% and explains EUR/AUD’s rise along with EUR/USD since December/ January. The AUD/USD -22% correlation to EUR/AUD reveals an AUD/USD rise would greatly assist to EUR/AUD’s drop.
The lightweight in the 3 way triangulation is clearly AUD/USD as AUD/USD’s range dopped to barely 150 pips and 200 pip weeks while AUD/USD should trade straight up easily to the 0.6800’s and 0.6900’s target at minimum.
Further to the 3 way triangulation is seen most specifically in averages from 5 to 50 days for EUR/USD,
EUR/AUD and AUD/USD as all trade within the confines of averages from 5 to 50 days.
The vast majority of currency pairs now trade within the parameters from 5 to 253 day averages to include USD/JPY at the 200 and 253 day. The analysis from 5 to 253 day averages is the same concept as highlighted last week. Currency pair prices entered ranges and ranges is what to expect for the next months.
EUR/AUD for next week targets 1.6165 and 1.6082. Any price at 1.6400’s is acceptable for short entries.
EUR/USD trades the same story as last week from 1.0765, 1.0945, 1.1134, 1.1375 and 1.1623. EUR/USD above 1.1134 will be met with a brick wall at 1.1300’s. The price settle to EUR/USD was a 6 to 7 month event from 0.9500’s. The long only strategy highlighted over past months was the result to trade until EUR/USD reached settlement. The only trade concept currently is range trading.
USD/JPY brick wall is located at many points at 136.00’s beginning at 136.06 to the 200 day average at 136.59. USD/JPY 136.00 represents the mid point from the drop at 151.00’s to 127.00’s. The strategy is short while we wait for the big break at 134.28 to trade to target 133.06 then 132.00’s and much further down.
The BOJ is continually viewed from a monetary policy perspective as a north/ South divide on the BOJ board. The BOJ monetary policy derives and developed from a long tradition in Japan from The Edo period to Meiji to modern day
Its a north/ South power center Divide as agriculture Vs Industrialization regions
Within Japan are 47 Prefectures, 9 regions and big cities as Osaka, Kyoto, Tokyo. The city of Osaka was most important historically as Japan’s Financial center in the Japanese North. Not only was Osaka a port city but its the traditional location for USD/JPY to trade on the Osaka exchanges.
Rice and markets and capitalism developments started in Osaka Not one BOJ Head was appointed from Osaka.
The 1860’s South Japan hijacked BOJ from the north and reigned supreme ever since. Changes to monetary policy must derive from a majority of South Members otherwise monetary policy runs to its last breath. The BOJ is most active when the Board is filled with a majority of southern members. The current BOJ board is deadlocked.
GBP/CAD at current upper 1.6700’s approaches crucial 1.6800’s and overbought at 1.6800’s.
GBP/USD big break for 1.2700’s is now located at 1.2585. Last Friday, GBP/USD traded 1.2545 and highs this week at 1.2473. GBP/USD’s range remain 1.2236, 1.2250 to 1.2585.
DXY overbought next week begins at 102.00’s as DXY trades lower to vital 99.00’s and 98.00’s at thr 50 year monthly averages.
GBP/AUD top remains at 1.8545 on a short only strategy to target 1.8200’s.
GBP/JPY tops are located at 168.18 to 168.48. GBP/JPY requires a break at 164.23 to target 163.11 and 162.57. EUR/JPY 144.46 break for lower to target 141.00. Both GBP/JPY and EUR/JPY trade massive overbought on a short only strategy. CAD/JPY must break 99.61 for lower and the same story as last week.
GBP/NZD short to 1.9961 while EUR/NZD targets 1.7601 and 1.7489. Both trade massive overbought and easy short trades.
EM
USD/TRY ranges 19.5121 to 19.3087.
USD/BRL 5.0761 – 5.0251. USD/PLN 4.2293 to 4.1693.
USD/CZK was the big winner last week at USD/EM. Current range for next week 21.8388 to 21.6561.
USD/CNY 6.8873 to 6.8539.
USD/HUF 349.2854 to 340.9162.
Brian Twomey
BRIAN TWOMEY ON TRADING 