USD/JPY Movements Vs BOJ Interest Rates

For every 0.001 change in BOJ interest rates, USD/JPY moves 14 and 15 pips.

For every 0.001 change in BOJ interest rates, JPY/USD moves 0.71 and 0.81 pips.

USD/JPY last week moved 276 pips Vs JPY/USD 168 pips on overall 28 point change in BOJ interest rates.

From 140.25, weekly range 141.84 and 138.69.

Trading life is much easier to factor opposite exchange rates to interest rates then refactor. For example, JPY/USD factors to USD/JPY, TRY/USD to TRY/USD, BRL/USD to USD/BRL.

PLN/EUR to EUR/PLN and the list goes on and on for any currency pair on the planet. Same for stock indices, Gold, Commodities. The object is to work with small numbers then factor to the larger market numbers.

Brian Twomey

USD/JPY and BOJ: 1 week

USD/JPY market prices trade opposite to BOJ interest rates. If BOJ lowers interest rates then USD/JPY rises. The same principle exists for JPY/USD. BOJ interest rates dropped everyday last week to force JPY/USD lower and USD/JPY higher. Comments from Ueda and BOJ members reflects USD/JPY in relation to the Japanese Call Rate.

How to balance the Call Rate in relation to USD/JPY 140.58 and JPY/USD 0.0071133. The Call Rate is the most important rate among Japanese Interest rates.

USD/JPY began last week at 137.95 and rose to 140.71 or 276 pips and closed at 140.58. How did USD/JPY rise by the BOJ interest rates. USD/JPY rose 276 pips on a drop of 28 Call Rate points or 55 pips per day and 5.6 Call Rate points.

BOJ releases interest rates at 4:00 am EST but those rates are for the next day’s trade. The Fed releases interest rates at 4:15 PM to allow immediate profits for 24 hour trades while 7 hour trades begin at 2:30 am EST by ECB standards. Don’t confuse the points as all the interest rates says the same to ranges and targets. USD/JPY 55 pips per day for example is correct but light compared to the Fed’s 70 ish pips.

Below is the BOJ and USD/JPY for last week. Viewed in a broad context but all central banks look at exchange rates in extremely wide views. The ECB for example once factored EUR/USD in 2000 pip ranges. But EUR/USD once moved 3 nd 500 pips per day pre 2016. Post 2016, the story is much different as ranges are viewed in 3 and 500 pips. Markets today are much different than pre 2016 as prices slowed to a crawl by design.

Monday May 22 USD/JPY 137.95

133.67 and 142.36

137.81 and 138.08

125.94 and 151.09

Highs 138.68, Lows 137.48

Tuesday May 23 USD/JPY 138.58

133.86 and 143.45

138.44 and 138.71

126.52 and 151.78

Highs 138.90, lows 138.23

Wednesday May 24, USD/JPY 138.57

133.44 and 143.89

138.43 and 138.70

126.51 and 151.77

Highs 139.47, Lows 138.22

Thursday May 25 USD/JPY 139.44

132.88 and 146.31

139.30 and 139.57

127.30 and 152.72

Highs 140.22, Lows 138.80

Friday May 26, USD/JPY 140.03

131.76 and 148.80

139.89 and 140.17

127.84 and 153.37

Highs 140.71, Lows 139.48

Proposed trade for Monday May 29

Monday May 29, USD/JPY 140.58

131.72 and 150.03

140.43 and 140.72

128.34 and 153.97

Brian Twomey

FX Weekly: Yield Curve and 20 Currency Pairs

As DXY rose from 100.00’s lows, supports built into the current price beginning at 103.69, 103.31, 102.73 and 101.92. Current DXY ranges from 105.73 to 103.69 and trades massive overbought. Massive overbought DXY began at 102.00’s and traveled to 104.42 highs. Severely overbought remains at 103.00’s and 102.00’s.

The DXY break below 105.00’s in March was the impetus for DXY to trade to 100.00 lows and EUR/USD to 1.1095 highs. DXY’s trajectory is not only much lower as the break higher at 105.00’s is not expected. And particularly when the DXY rise allowed overbought to USD/JPY, JPY cross pairs and wide rangers GBP/NZD, EUR/NZD, EUR/AUD and GBP/AUD.

Assume the DXY break at 105.00’s then means ranges from 105.00’s to 107.00’s then resistance points every 100 pips from 107.00 to 114.00;s. The DXY break at 105.00’s ensures overbought USD/JPY trades higher alongside JPY cross pairs and wide range currencies. The DXY break to 105.00’s ensures markets remain trading in dead range modes without relief.

DXY’s move from 102.00’s to 104.00’s was responsible for USD/JPY to break above 135.00’s and travel to 140.00 highs. USD/JPY now trades at extreme overbought particularly at 141.37. Shorts target easily 138.17 and 137.39 and much lower over time.

DXY’s rise from 102.00’s to 104.00 allowed GBP/NZD to trade 600 pips last week from 1.9700’s to 2.0400 and EUR/NZD at 600 pips from 1.7100’s to 1.7700’s. EUR/NZD will travel straight back on a DXY drop to 1.7295, 1.7274 and 1.7156 while GBP/NZD targets 1.9748 and 1.9684. Watch EUR/NZD for the break at 1.7351 and GBP/NZD at 1.9859.

What ensures the GBP/NZD and EUR/NZD targets is not only DXY but GBP/NZD at extreme overbought from 1.9500’s and EUR/NZD at 1.7000’s and 1.6900’s.

EUR/AUD is up against the same 1.6500 line and GBP/AUD at 1.9000’s. Both trade at extreme overbought and EUR/AUD targets 1.6087 while GBP/AUD requires a break at 1.8569. Good targets for GBP/AUD at 1.8700’s and 1.8600’s factors as an easier trade. EUR/AUD is the preferred currency as EUR/AUD contains easy ability to travel straight to 1.6087.

EUR/USD requires a break at 1.0770 to target 1.0872 then 1.0943. EUR/USD at 1.0770 translates to DXY breaks below at 103.69 and 103.31. The 1.0872 target factors to DXY at 102.76. EUR/USD trades in a tight relationship to DXY. The EUR/USD 1.0872 target and DXY 102.76 is not expected to trade this week.
The EUR/USD Vs DXY tight relationship must break in order for better range levels to trade or markets remain in slow price mode against dead movements.

GBP/USD trades to the brink at 1.2326 from the open at 1.2343. While GBP/USD’ s next big break is located at 1.2593, the vital line prior to 1.2593 is located at 1.2489. This line at 1.2489 is expected to hold this week to proposed GBP/USD longs.

JPY cross pairs trade extremely close to tops and extreme prices. AUD/JPY 92.59, EUR/JPY 153.94, CAD/JPY 104.47, NZD/JPY 87.02 and GBP/JPY 178.28. GBP/JPY trades from 172.00 to 174.00’s at the 33 and 34 year monthly averages. The next big line above is located at 174.95. A break below 173.29 allows GBP/JPY to target 171.00’s easily.

USD/CAD and CAD/JPY both trade at extreme overbought levels. USD/CAD is not only the problem due to small trade ranges over past months but no need to rush and trade USD/CAD. USD/JPY is much better and will profit far higher than USD/CAD.

CHF cross pairs as EUR/CHF, GBP/CHF, AUD/CHF and NZD/CHF trade severely oversold. CAD/CHF is not worthy of a trade until the USD/CAD and CAD/JPY relationship rectifies. The message from CHF cross pairs is longs to anchor currencies are well supported and DXY is miles to high.

AUD/USD and NZD/USD both trade massive oversold. Both require a lower DXY to create wider trade ranges.

Yield Curve

The 2 year and 10 inverted since March 2022 or 14 months. The entire yield curve inverted as every yield from 1 month to 30 year trades higher than the 10 year. Instead of the 10 year to serve as the top yield and remainder yields trade below, the 10 year shifted from top to bottom position..

The prior upslope yield curve from the 10 year is now a downslope yield curve beginning at the 1 month yield and ends at the 10 year. As written months ago, the 2 and 10 inversion wasn’t the story nor guarantee of recession in 6 months.

March 2022, DXY traded 96.00’s and rampaged 1800 pips to 114.00’s just 7 months later to force the bond price higher and yields lower. The ultimate safety trade to long DXY ruled for 7 months in 2022 and forced the yield curve inversion.

A lower DXY will eventually shift the 10 year back to top position.

Vital breaks next week: 1 month to 10 year

1M = 5.7640
3M = 5.3820
6M = 5.4080

1Y = 5.1645
2Y = 4.4275
3Y = 4.0970

5Y = 3.8315
7Y = 3.7935
10Y = 1.9230.

Average of the Yield curve 3.8435 at the 5 year yield. Exclude 10 year, average = 4.7788 or between the 1 and 2 year yield.

Yield Curve added 20 and 30 yield

1M = 5.7640
3M = 5.3820
6M = 5.4080

1Y = 5.1645
2Y = 4.4275
20 = 4.1220

3Y = 4.0970
30 = 3.9765
5Y = 3.8315

7Y = 3.7935
10Y = 1.9230

Average of the yield curve is now 4.3535.

Brian Twomey

Treasury Yield Curve

Vital breaks next week: 1 month to 10 year

1M = 5.7640

3M = 5.3820

6M = 5.4080

1Y = 5.1645

2Y = 4.4275

3Y = 4.0970

5Y = 3.8315

7Y = 3.7935

10Y = 1.9230.

Average of the Yield curve 3.8435 at the 5 year yield. Exclude 10 year, average = 4.7788 or between the 1 and 2 year yield. All yield rates are higher than the 10 year. Normal = All rates lower than 10 year.

10 minus 2 year = minus 2.50 and 10 minus 3 month = minus 3.45.

Brian Twomey

EUR/USD V DXY

EUR/USD 1.0753 Vs DXY 103.95

1.0768 Vs 103.80

1.0798 Vs 103.51

1.0872 Vs 1.0276

1.0947 Vs 102.02

1.1021 Vs 101.27

Brian Twomey

USD/JPY, JPY/USD and BOJ

Yesterday’s interest rates are used for today’s trade. Today’s interest rates are used for tomorrow’s trades. All interest rates are found on central banks websites and freely offered and displayed prominently.

Here’s the laugh. People pay good money to Bloomberg, Reuters and others for today’s interest rates. Canada’s Corra rate for example releases at 9:00 am EST but all required is wait till 11:00 am EST or 12:00 Noon for today’s interest rates for tomorrow’s trades. Why pay money for rates offered for free.

Understand this point. Every market price on the planet to include FX, stocks, Stock indices, gold, metals and everything else moves by an interest rate. Trust these words. Hedge funds don’t understand this point nor today’s currency analysts. The world of trading lacks understanding to how markets operate. They will never have understanding unless they play around with the essential numbers.

Next. Yesterday’s BOJ to today’s USD/JPY and JPY/USD trades.

USD/JPY 139.67

131.42 and 144.04 and 148.42

139.80 and 139.53

127.51 and 146.32, 152.97

JPY/USD

0.0071597 = 139.67 as 1 divide 0.0071597

0.0067372 and 0.0076086

0.0071668 and 0.0071525

0.0065368 and 0.0078419

JPY/USD 7 numbers. USD/JPY must have corresponding numbers for accuracy. USD/JPY’s big break for lower is located at 136.34. Wrong. The actual number is 136.3432 then JPY/USD as the same number = 0.0073344.

See 127.51 = 0.0065368 while 148.42 = 0.0076086. USD/JPY requires a lower BOJ interest rate to move lower.

Brian Twomey

USD/JPY, BOJ, Intervention

Many would view USD/JPY at 140.03 and say the price is to high, BOJ will intervene. We’re hearing rumblings from a few regarding intervention. The current price is not the view to intervene but the range of BOJ prices in relation to the interest rate. Notice the singular word to rate. The BOJ only has 3 interest rates and 1 interest rate to serve as the middle bound rate. So we have only 2 rates.

USD/JPY 140.03 is the beginning to view possible intervention. USD/JPY in relation to interest rates runs aa follows”

131.76 and 148.80

140.17 and 139.89

127.84 and 153.37

Broken down.

131.76, 144.41 and 148.80

140.17 and 139.89

127.84, 146.70, 153.37

From 148.80 to 140.03 = 877 pips and 1334 pips from 153.37 to 140.03

The top price for USD/JPY was 151.93 when DXY achieved 114.79 highs. BOJ intervened October 22 at 149.00’s and 150.00’s and drove USD/JPY to 146.00’s.

Let’s go with 151.93. What did October 22 look like for BOJ interest rates and USD/JPY.

143.26 and 161.11

152.08 and 151.77

139.77 and 165.14

Broken down

143.26, 156.52, 161.11

152.08 and 151.77

139.77, 158.53, 165.14

161.11 minus 151.93 = 918 pips

165.14 minus 151.93 = 1321 pips. Now compare above and below. 877 pips Vs 918 pips and 1334 pips Vs 1321.

Same numbers to distance from present exchange rates today and OCT 22. Because interest rate difference was 70 points from today to OCT 22. The BOJ topside and middle interest rates didn’t change but the bottom number changed by lower at 70 points.

And the bottom side interest rate number I assume was the verdict to intervene. The exchange rate is the key as BOJ interest rates hardly move any great distance day to day. But BOJ interest rates don’t have to move as a slight change by 1 and 2 points can really move USD/JPY.

The BOJ topside number today is 0.941 and OCT 22 = 0.943. The bottom today 0.913 Vs 0.920 on October 22 and 70 pip difference.

The October intervention send USD/JPY to 146.00’s. USD/JPY 146.00’s is found from 152.08 to 143.26 or 147.67.

BOJ interest rates are the easiest and quickest to factor for exchange rate trades. And this validates my friend’s statement that many money managers in Japan trade all types of currencies.

Overall, exchange rates are in the same situation today as Oct 22. The topside is to high in relation to interest rates.

Brian Twomey

FX Next Week: EUR/USD V DXY and USD

DXY began trading last week at deeply overbought 102.00’s then traveled to 104.00 highs. At 104.00’s clocks in at 400 pips higher since the 100.00 lows. Currency markets may begin to use the word extreme prices as it applies to DXY, USD/JPY, GBP/JPY, EUR/JPY, AUD/USD, NZD/USD, USD/CAD.
GBP/USD and EUR/USD trade deeply oversold yet not close to extreme levels.

DXY since May 1 traded 18 days at an average of 36 pip days or at bare minimums to allowable normal day trade moves. This doesn’t reveal we have a new upward DXY trend. DXY 4 weeks ago traded 101.00’s at the same time GBP/USD hit massive resistance at 1.2700’s and EUR/USD at crucial 1.1100’s. The month of May was spent trading reversals as short GBP/USD and EUR/USD vs long and higher for DXY and USD.

The problem to the higher DXY and USD scenario is DXY achieved extremes and higher DXY forced extreme highs to USD/JPY, USD/CAD and many EM currencies as EM/USD. GBP/USD and EUR/USD traded fairly normal ranges at 400 pips from the vital highs. AUD/USD, NZD/USD and USD/CAD lacked the ability to trade 400 pip ranges as AUD/USD and NZD/USD now trade extreme oversold to USD/CAD and DXY extreme overbought.

What we have is DXY and EUR/USD at the approach of 105.00’s as market prices traded directly to the brink. DXY and EUR/USD trade roughly 150 pips to the crucial 105.00 levels. The reversals seen in May should now result in DXY and USD downside to EUR, GBP, AUD and NZD longs and higher.

USD/JPY was caught in the crossfire to higher DXY and lower EUR/USD as USD/JPY has been overbought since at least 135.00’s. USD/JPY decided it should trade above the DXY 36 pip trade days by trading 100 pip days over many days throughout May.

The commonality to currency prices is 400 pip ranges and 200 pip targets. The further commonality to 105.00’s is all currency prices and all financial instruments fall in line inside a nice and neat format. Higher EUR/USD for example says higher XAU/USD, SPX, Crude, Yields and associated risk assets.

AUD/USD for example at 0.6500’s trades extreme oversold to the 0.6930 average or 400 pips. Note 0.6930 today Vs December 0.6970. The AUD price changed while the average remained the same. AUD/USD now trades at the extremes from 0.6900’s and many averages above 0.6900’s.

NZD/USD at 0.6000’s trades deeply oversold from 0.6433. In December the average was 0.6457 or a 19 pip change in 5 months.

The week

USD/BRL as written from Sunday, below 5.0435 and 5.0487 targets 4.9531, 4.9520, 4.9037. Lows achieved 4.9349 and + 500 pips.

Overall for next week, short USD, DXY, USD/JPY is matched by longs to EUR, GBP, AUD and NZD.

NZD/USD for example targets 0.6257 at minimums and AUD/USD at 0.6755 and 0.6868. Long is the only strategy.

EUR/USD higher must break 1.0780 then the same old story as 1.0780, 1.0943, 1.1127. Current EUR/USD trades 1.0715 to 1.0650 on a long only strategy.

USD/JPY trades not only severely overbought but extremes begin at 141.51. The range to extremes trades from 141.51 to 143.79. Targets next week are located at 137.75 and 136.99. USD/JPY must break 136.23 then USD/JPY accelerates lower.

EUR/USD any price in the area of 1.0704 is ripe for longs to target 1.0873 and 1.0953 as just the beginning to higher prices. EUR/USD big break for lower from 1.1100’s was 1.0953 to allow 200 pips trade to 1.0700’s.

GBP/USD from 1.2700 highs traded to the brink at vital 1.2331. The levels at 1.2331 must hold then GBP/USD ranges from 1.2331 to 1.2593 and 1.2855. Same old GBP/USD story over the last months. GBP/USD’s big break was 1.2593 to offer 200 pips to 1.2300’s. GBP/USD first target is located at 1.2473 then the resolution to 1.2593.

USD/CAD targets 1.3449, 1.3322 and caution at 1.3298. The caution to USD/CAD is overbought CAD/JPY.

GBP/JPY targets easily 171.30 and 169.67 as the vital break must occur at 168.02. EUR/JPY targets 147.93 Vs vital break at 146.82.

Shorts to EUR/AUD and GBP/AUD as well as GBP/NZD and EUR/NZD.

Best trades for the next few weeks as follows: EUR/USD, GBP/USD, GBP/JPY, EUR/JPY, USD/JPY, EUR/AUD, GBP/AUD, GBP/NZD, EUR/NZD. Then added are: AUD/USD, NZD/USD, USD/CAD.

For EM/USD, last week’s trades hold as USD/MYR, USD/RON, USD/CNY, USD/TRY, USD/CZK, SGD/MYR.

For USD/TRY targets 18.87 as first target and any price above is good for shorts as 18.87 USD/TRY must meet the target.

Brian Twomey

NZD/USD Trade

This 7 hour trade will finish off NZD for this day

NZD/USD

Long Short Line 0.6157

Most Important 0.6133 and 0.6153 Vs 0.6161, 0.6165, 0.6169, 0.6173, 0.6181, 0.6185, 0.6189

Bottom 0.6125 achieves by 0.6133 and 0.6141

Upper Target 0.6189

Continuation Fail 0.6173

Brian Twomey

Trades: NZD/USD, EUR/NZD, GBP/NZD

Both EUR/NZD and GBP/NZD are the same currencies. NZD/USD is the opposite. If NZD/USD goes short then EUR/NZD and GBP/NZD go long. If NZD/USD goes long then EUR/NZD and GBP/NZD goes short. Multiple trades now exist for RBNZ. Plus multiple trades exist per currency pair.

NZD/USD

Long above 0.6267 to target 0.6311. Levels: 0.6275, 0.6284, 0.6292, 0.6301, 0.6309, 0.6318.

Short 0.6311 to target 0.6301

Short below 0.6267 to target 0.6223. Levels: 0.6259, 0.6241, 0.6223, 0.6215

Long 0.6223 to target 0.6233

Target to Target: 0.6311 and 0.6223

EUR/NZD
Long above 1.7219 to target 1.7288. Levels: 1.7232, 1.7246, 1.7259, 1.7273, 1.7286, 1.7300
Short 1.7288 to target 1.7273
Short below 1.7219 to target 1.7149. Levels: 1.7206, 1.7192, 1.7179, 1.7165, 1.7152, 1.7138
Long 1.7149 to target 1.7165
Target to Target: 1.7288 and 1.7149

GBP/NZD

Long above 1.9812 to target 1.9899. Levels: 1.9829, 1.9846, 1.9863, 1.9880, 1.9897

Short 1.9899 to target 1.9880

Short below 1.9812 to target 1.9724. Levels: 1.9795, 1.9778, 1.9761, 1.9744, 1.9727, 1.9710

Long 1.9724 to target 1.9744

Target to Target: 1.9899 and 1.9724

Brian Twomey

RBNZ Interest Rates for May 2023 Meeting

Cash rate (%pa)		Bank bill yields (%pa)			Secondary market government bond yields (%pa)				Swap rate spread close (bps)
Date	Official Cash Rate (OCR)	Overnight interbank cash rate	30 days	60 days	90 days	1 year1	2 year1	5 year	10 year	2-10s2
10 May 2023	5.25	–	5.51	5.57	5.62	5.25	4.70	4.10	4.17	-81
11 May 2023	5.25	–	5.50	5.56	5.61	5.23	4.63	4.05	4.12	-83
12 May 2023	5.25	–	5.51	5.56	5.60	5.23	4.60	4.01	4.08	-76
15 May 2023	5.25	–	5.51	5.55	5.58	5.19	4.54	3.96	4.05	-78
16 May 2023	5.25	–	5.55	5.59	5.64	5.25	4.63	4.05	4.12	-82
17 May 2023	5.25	–	5.54	5.59	5.65	5.25	4.67	4.08	4.16	-89
18 May 2023	5.25	–	5.57	5.63	5.70	5.34	4.78	4.19	4.26	-96
19 May 2023	5.25	–	5.63	5.72	5.79	5.52	5.04	4.41	4.41	-105
22 May 2023	5.25	–	5.68	5.77	5.82	5.57	5.08	4.43	4.42	-100
23 May 2023	5.25	–	5.67	5.75	5.83	5.57	5.03	4.40	4.40	–

_{[1] Where there is no suitable benchmark bond, none is reported. See series description for details.[2] The spread between the 2 and 10 year swap rate is presented in basis points to better align with market conventions.}

OCR at 5.25 matches the FED at 5.25. The RBNZ interest rates historically were priced far above Fed Rates. The 5, 4 and 3 day higher rates qualifies to RBNZ raise. How far back was this seen. Many, days is the answer. Rare day to disappoint with no raise under the 5 day rule scenario. Only 2 options for RBNZ: raise or on hold. OCR at 5.25 vs Inflation 6.7.

I will post NZD trades this evening long before RBNZ. What will all see. NZD/USD minimum 32 and Max at 62. Maybe in 1 direction.

Brian Twomey

RBNZ Interest Rates; Raise or no Raise

Cash rate (%pa)		Bank bill yields (%pa)			Secondary market government bond yields (%pa)				Swap rate spread close (bps)
Date	Official Cash Rate (OCR)	Overnight interbank cash rate	30 days	60 days	90 days	1 year1	2 year1	5 year	10 year	2-10s2
09 May 2023	5.25	–	5.50	5.56	5.62	5.25	4.77	4.15	4.20	-83
10 May 2023	5.25	–	5.51	5.57	5.62	5.25	4.70	4.10	4.17	-81
11 May 2023	5.25	–	5.50	5.56	5.61	5.23	4.63	4.05	4.12	-83
12 May 2023	5.25	–	5.51	5.56	5.60	5.23	4.60	4.01	4.08	-76
15 May 2023	5.25	–	5.51	5.55	5.58	5.19	4.54	3.96	4.05	-78
16 May 2023	5.25	–	5.55	5.59	5.64	5.25	4.63	4.05	4.12	-82
17 May 2023	5.25	–	5.54	5.59	5.65	5.25	4.67	4.08	4.16	-89
18 May 2023	5.25	–	5.57	5.63	5.70	5.34	4.78	4.19	4.26	-96
19 May 2023	5.25	–	5.63	5.72	5.79	5.52	5.04	4.41	4.41	-105
22 May 2023	5.25	–	5.68	5.77	5.82	5.57	5.08	4.43	4.42	–

_{[1] Where there is no suitable benchmark bond, none is reported. See series description for details.[2] The spread between the 2 and 10 year swap rate is presented in basis points to better align with market conventions.}

See the 30, 60 and 90 day rates move 5 points. The 30 and 60 day rates qualify for raise. The 1 year rate qualifies.

Brian Twomey

Long Term Targets: USD/CNY, USD/MYR, USD/TRY, USD/RON, USD/BRL, USD/CZK

Overbought GBP/JPY at the 33 year monthly average is the same story from the perspective of EM/JPY as all EM/ JPY currencies trade at massive overbought levels. Take a pick, throw a dart and short.
Overbought begins at BGN/JPY, BRL/JPY, CNY/JPY, DKK/JPY, INR/JPY, ISK/JPY, KRW/JPY, MXN/JPY, MYR/JPY, PHP/JPY, PLN/JPY, SGD/JPY, THB/JPY. All EM/JPY are consistent to overbought USD/JPY, EUR/JPY and CAD/JPY.

Overbought DXY and USD is compatible to severely overbought to USD/CNY, USD/MYR, USD/RON, USD/TRY. The extraordinary currency is USD/TRY as light years of distance exist to targets at 18.8710 and 16.2304 from 19.000’s. USD/BRL contains a short only strategy in accordance with USD however USD/BRL overbought Vs oversold within its price path are fighting against each other.

USD/CZK is a bright and shiny currency pair however oversold USD/CZK is also fighting against the USD and DXY overbought trend. What accounts for USD/CZK is the massive trade ranges available. USD/CZK has every ability to trade 3 and 4,000 pips and this range wouldn’t dent USD/CZK’s price. USD/CZK today is what USD/CNY was years ago to massive trade ranges.

Massive overbought to USD/CNY, USD/MYR, USD/RON and USD/TRY means not only extreme overbought but all trade at uppermost tops. All are easy trades.

USD/CNY first vital break is located at 6.9466 then long term targets align as 6.8901, 6.8373, 6.8006 and caution at 6.7967.

USD/MYR on a break of 4.4725 targets 4.4415 and 4.3798 and caution at 4.3503. Holding USD/MYR from trading lower is 4.3546.

USD/RON requires a break at 4.5735 to target 4.5287 and 4.5129.

USD/CZK below 21.9476 and 22.0182 targets 21.5616.

USD/TRY targets not just 18.8710 and 16.2304 but remaining targets are located at 14.3986 and 13.0629. The weekly range is located from 19.9401 to 19.7277. Shorts for USD/TRY exists for months to come. USD/TRY will follow the USD trend miles lower.

USD/BRL below 5.0435 and 5.0487 targets 4.9531, 4.9520, 4.9037. Weekly range for longs and short: 5.0251 to 4.9561. Not much thrills to USD/BRL as overbought and oversold problems fight against each other however short only remains the strategy. The distant average below is located at 4.7786.

Brian Twomey

FX Weekly: GBP/USD Day Trade, GBP/JPY, EUR, GBP, JPY

The GBP/NZD target at 1.9733 and reported over last months achieved lows Friday at 1.9767. The trade duration from 2.0392 highs was 3 weeks. The leader currency and early warning to GBP/NZD’s fall was EUR/NZD as EUR/NZD completed its target at 1.7200’s 2 weeks ago from 1.8000 highs. As GBP/NZD and EUR/NZD accomplished targets, both are expected to join the rank and file of currencies trading in ranges.

GBP/USD over the past 56 trade days, traveled 859 pips, From a day trade perspective, here’s the pips and percentages.

GBP/USD for 15 of 56 trade days had 100 pips or above trade days or 26.10%. GBP/USD traded 41 days of 56 below 100 pips or 73.21%. GBP/USD 1 day traded 204 pips.

GBP/USD at 70 pip trade days = 10 of 56 or 17.86%. Below 70 pip trade days = 16 of 56 or 28.57%. GBP/USD at 60 pips and below = 10 of 56 or 17.86%.

GBP/USD below 70 and 60 pip trade days = 26 of 56 or 46.43%. GBP/USD 70 pip to 100 trade days = 25 of 56 or 14%.

GBP/USD in the past 56 trade days ranged from 1.1820 to 1.2679 or 859 pips. Take 859 divide 56 = 15.33. Speculation for 15.33 = Minimum pips that must trade. GBP/USD traded the vast majority of 859 pips from 15.33 to 70. A trade month factors at about 20 days, total 56 trade days is just short of 3 months.

GBP/JPY trades 170.37 to 172.24 – 174.83 at the 31, 32 and 33 year monthly averages. GBP/JPY’s big break for lower is located at 167.42. At 167.42 is located the 24 year monthly average and an easy break to accomplish.

GBP/JPY lower targets are located at averages about every 100 pips from 172.24 to 165.27. Once 165.27 breaks then GBP/JPY accelerates lower.

Conceivably, GBP/JPY from 40 year monthly averages or 480 data points could trade much higher to 190.00’s however averages from 148.00’s to 155.00’s are massively overbought to the 172.00 price and GBP/JPY’s location at the 33 year monthly average automatically informs GBP/JPY is miles to high.

The refinement to the long term model is to no longer view monthly averages and enter masses of data to find targets as the model condenses monthly averages into very few numbers to arrive at the same answer in less than 30 minutes. The model applies to 476 currency pairs.

GBP/JPY targets 165.44, 161.03, 160.23 and 159.18. GBP/JPY’s big break for lower is located at 158.75 at the 17 year monthly average. GBP/JPY’s overbought average at 158.75 has easy ability to break and GBP/JPY to trade much lower over time.

DXY 99.00’s at the 50 year monthly average, GBP/JPY 172.00’s at the 33 year monthly average informs USD/JPY and EUR/JPY trades at the upper monthly average Richter scale and non normal to currency markets.

Normal currency and market prices trades from the 1 to 10 year monthly averages. This is exactly where market prices are heading to achieve normality again.

The Week

EUR/USD big breaks are located at 1.0799, 1.0947, 1.1130 and 1.1300’s. Above 1.0947 targets 1.1006 and 1.1066. EUR/USD averages are dropping and not a good development for longs. EUR/USD however is trading far to close to DXY and for this reason alone, we are long and remain long over many weeks to come. A EUR drop below 1.0799 is a long opportunity.

GBP/USD big breaks are found at 1.2348, 1.2597 and 1.2858. GBP/USD averages are also dropping however any price in the vicinity of 1.2348 is a long opportunity.

Dropping averages are the result to overbought DXY. As DXY drops, EUR/USD and GBP/USD averages will again rise along with EUR/USD and GBP/USD prices.

USD/JPY targets easily 136.71 and the required break for lower is located at 135.62. The minimal target is 128.00’s. If as I suspect, USD/JPY trades at upper reaches to monthly averages then the 128.00 target is a breeze to achieve. Currently, USD/JPY must trade to 128.00’s as it doesn’t have any choice except to trade minimally at 128.00’s. Longer term target 122.00’s and 121.00’s.

As GBP/NZD and EUR/NZD achieved long term targets, EUR/AUD and GBP/AUD are the only currency pairs remaining. EUR/AUD for lower must break 1.6116 and a short only strategy. GBP/AUD as our sleeper currency trades overbought above vital 1.8426.

Currency markets switched from trends to current ranges. This means weekly trades adjusts to range trades as 2 longs and 2 shorts per currency and per financial instrument to continuously trade and profit throughout the week.

NZD/USD trades overbought to oversold AUD/USD. No hurry to trade both however long AUD/USD is the best strategy. Overbought CAD/JPY trades in contention to overbought USD/CAD. No question to short CAD/JPY.

The 6 best currencies to trade and profit are EUR/USD, GBP/USD, USD/JPY, GBP/JPY, EUR/JPY, EUR/AUD.

USD/EM

USD/EM currently contains many more miles of downside than long EUR/EM.

USD/CZK trades between 21.9479 to 22.0712. USD/CZK targets the break at 21.9479 then 21.8246.
USD/PLN trades 4.2363 to 4.1462. Short 4.2363 to target 4.1462.

USD/CNY trades massive overbought from 7.0076 and targets easily 6.9759
USD/DKK below 6.8997 targets 6.8020

USD/HUF targets 338.04 from 347.45
USD/MYR massive overbought at 4.5385 targets easily 4.4994.

SGD/MYR overbought from 3.3751 and targets 3.3632.

SGD as Sing Matches to MYR as Ring = the currency Sing/ Ring.

Brian Twomey

GBP/USD Day Trade Percentages

Day trades are derived from either the 7 1/2 hour trade from 2:30 am EST to 10:00 am EST or the 24 hour trade from 5 pm EST to 5 pm EST. The vast majority of trading occurs from 2:30 am to 10 am. The 24 hour trade allows profits from 5 pm to 2.30 am and from 10:00 am to 5 pm. Not 1 pip profit is missed in the 24 hour trade especially for central bank meetings for the RBA, RBNZ and BOJ.

The 24 hour trade allows to profit from outlier pips. If GBP/USD trades an 80 pip day, the full 60 ish pips will profit from the 7 hour trade and the additional 20 ish pips profit from the 24 hour trade.

How does GBP/USD 63 pips match to the past 56 trade days. Here’s the data and percentages.

GBP/USD 15 of 56 trade days, had 100 pips or above trade days or 26.10%. GBP/USD traded 41 days of 56 below 100 pips or 73.21%.

GBP/USD 1 day traded 204 pips.

GBP/USD at 70 pip trade days = 10 of 56 or 17.86%. Below 70 pip trade days = 16 of 56 or 28.57%.

GBP/USD at 60 pips and below = 10 of 56 or 17.86.

GBP/USD below 70 and 60 pip trade days = 26 of 56 or 46.43%.

GBP/USD 70 pip to 100 trade days = 25 of 56 or 14%.

GBP/USD in the past 56 trade days ranged from 1.1820 to 1.2679 or 859 pips. Take 859 divide 56 = 15.33. Speculation for 15.33 = Minimum pips that must trade.

GBP/USD = 63

Long Short Line 1.2424

Most Important 1.2393 and 1.2417 Vs 1.2431, 1.2439, 1.2447, 1.2455, 1.2471, 1.2479, 1.2487, 

Bottom 1.2361 achieves by 1.2376 and 1.2392

Upper Target 1.2487

Continuation Fail 1.2455

Brian Twomey

US 2 Year Yield Vs German 2 Year

Weekly Trades. Europe Ester 3.151 Vs Fed Funds 5.08. Any requests, feel free and glad to post.

USD 2 year

Long above 4.1219 to target 4.3238

Short 4.3238 to target 4.2773

Short below 4.1219 to target 3.9199

Long 3.9199 to target 3.9665

German 2 Year

Long above 2.6955 to target 2.8470

Short 2.8470 to target 2.812

Short below 2.6955 2.5441

Long 2.5441 to target 2.579

US 4.1219 Vs German = 4.1219 Vs 2.6955

US 3.3238 Vs German 2.8470

US 3.9199 Vs German 2.5441

Range 40 points V 30 points German.

I don’t know how to post pictures. Its all about numbers

Brian Twomey

FX Next Week: USD/JPY, JPY Cross Pairs, EUR, GBP

DXY at week’s beginning at low 102.00’s opened deeply overbought and decided to travel to a higher degree of overbought at 103.00’s. For next week, any price in the 103.00’s remains massively overbought and short is the only strategy.

Not only is DXY 103.00’s overbought but the crucial 105.00 line approaches. DXY at 105.00’s is not expected to break higher as this vital break represents a massive change to currency markets. Then consider the road for DXY to travel. Resistance points are located at every 100 pips from 105.00’s to 114.78 at the September highs.

Higher DXY sent USD/EM to richter scale overbought. The same short strategy remains for next week: Short USD/HUF, USD/CZK, USD/DKK, USD/RON, USD/MYR, USD/CNY. Overall, throw a dart, pick a USD currency and short.

USD/CZK from Sunday, Massive overbought USD/CZK from 21.7515 targets 21.5524 then 21.2501. Lows achieved 21.6300’s or 1200 pips. USD/DKK achieved 6.8200’s target from 6.8600’s.

EUR/PLN targets easily 4.5329 and 4.5630 from 4.5190, Target achieved at 4.5300;s.

EUR/USD opened the week at 1.0848. Sunday’s range 1.0827 to 1.0956. Next week range 1.0811 to 1.0951 and 1.0951 to 1.1132.

Overbought DXY sent EUR/USD to the brink at vital 1.0811. EUR/USD above 1.0811 trades massive oversold. EUR/USD traded from the range top at 1.0900’s to vital 1.0811. Overall EUR/USD traded a range.

GBP/USD opened the week at 1.2446. Last week’s range for GBP/USD: 1.2351 to 1.2602, 1.2602 to 1.2752 and 1.2752 to 1.2863. Next week: 1.2351 to 1.2600 and 1.2600 to 1.2750 and 1.2750 to 1.2860. Overall, GBP/USD traded a tiny range this week and higher is the way for next week.

Overbought DXY sent USD/JPY to extraordinary depths of overbought. USD/JPY began trading overbought at 133.00’s and 134.00’s and now 137.00’s. Longs were impossible especially as USD/JPY not only approaches the vital 152.00 line but massive overbought begins at 126.00’s and 120.00’s and many averages down to 104.00’s.

USD/JPY overbought means short, medium and long long term. To understand the overbought 126.00 line, the BOJ line is at 125.00’s and this line will drop to 123.00’s on a lower USD/JPY.

The BOJ views tops from 200 pips. Last top reported from the BOJ was 140.00’s. Today 142.00’s. The new BOJ interest rate arrangement disregards the need to intervene yet the BOJ last intervened at USD/JPY 149.00’s. USD/JPY now at 137.00’s deserves deep caution to the BOJ as the BOJ knows exactly what they are doing. We are not dealing with Stupid when it comes to USD/JPY.

EUR/JPY. What’s wrong with EUR/JPY. Here’s the usual daily price path: 148.93, 149.02, 149.11, 149.21, 149.40, 149.49, 149.59.

Note 149.11 to 149.21 and 149.49 to 149.59. The numbers reveal automatically, the spreads are far to wide and the price to high. A lower EUR/JPY must see a daily decrease to spread numbers within the price path.

EUR/JPY short for next week at any price in the severely overbought 149.00’s to target the eventual break at 146.22. GBP/JPY short next week at overbought 171.00’s to target the break at 167.08 then much lower to longer term targets.

USD/JPY, EUR/JPY and GBP/JPY are 3 outlier currencies holding up the progress to normality. GBP/JPY and EUR/JPY correlations to GBP/USD and EUR/USD ensures great moves and good profit opportunities for USD/JPY, EUR/JPY and GBP/JPY.

From 28 currencies, 9 are the main focus to trade as follows: USD/JPY, GBP/USD, EUR/USD, GBP/JPY, EUR/JPY, EUR/AUD, GBP/AUD, EUR/NZD and GBP/NZD. Remainder 19 currencies are severe under performers.

Gold

XAU/USD bottomed at 1600.00’s Vs EUR/USD at 0.9500’s and traveled 400 points to 2000.00’s.

Overall, required is the USD/JPY, EUR/JPY and GBP/JPY correlation arrangement to right size to add trades and normality to the remainder 19 currencies.

Brian Twomey

NZD/USD Vs AUD/USD, RBNZ Vs RBA

The RBNZ releases exchange rate Fixes at 3 pm NZD time or 10 PM EST. Bank Bill mid rates are released at 11:10 NZD time or 6 PM EST. The RBNZ releases interest rates before exchange rates. This allows the ability to factor intertest rates first to apply to exchange rates. All central banks release interest rates before exchange rates. The interest rates controls the exchange rates through the many Fixes throughout the 24 hour trade period. This means tops, bottoms, support and resistance levels are known in advance. Every trade at every minute of everyday is known.

Interest rates correlate 100% to exchange rates. Its impossible to not correlate 100% to exchange rates. Interest rates are most important to trades, support and resistance levels and profits in the spot market. Money supplies are most important for Futures contracts. Both money supplies and interest rates together are important for a monetary policy picture.

Europe over the past 10 years had a far lower money supply then the FED. The goal was increase money supplies to match the Fed. How? By lowering interest rates to expand the money supply. Restrict the money supply means raise interest rates.

Interest rates and money supplies correlate negative 100%. Its impossible not to correlate negative 100%.

AUD and RBA are most important to begin the trade day at 3 am EST to Sydney 5 pm on release of exchange rates. OCR and bank bills are released at 9 am Sydney or 7 pm EST. AUD trades are known in advance.

Difference between the RBA and RBNZ is OCR moves in New Zealand while RBA remains the same ever4yday.

Interest rates already informed long ago, AUD and NZD would trade dead ranges. No distance.

Cash rate (%pa)		Bank bill yields (%pa)			Secondary market government bond yields (%pa)				Swap rate spread close (bps)
Date	Official Cash Rate (OCR)	Overnight interbank cash rate	30 days	60 days	90 days	1 year1	2 year1	5 year	10 year	2-10s2
04 May 2023	5.25	–	5.47	5.54	5.60	5.22	4.67	4.04	4.06	-91
05 May 2023	5.25	–	5.49	5.55	5.62	5.22	4.63	4.02	4.10	-87
08 May 2023	5.25	–	5.49	5.55	5.62	5.22	4.72	4.10	4.14	-88
09 May 2023	5.25	–	5.50	5.56	5.62	5.25	4.77	4.15	4.20	-83
10 May 2023	5.25	–	5.51	5.57	5.62	5.25	4.70	4.10	4.17	-81
11 May 2023	5.25	–	5.50	5.56	5.61	5.23	4.63	4.05	4.12	-83
12 May 2023	5.25	–	5.51	5.56	5.60	5.23	4.60	4.01	4.08	-76
15 May 2023	5.25	–	5.51	5.55	5.58	5.19	4.54	3.96	4.05	-78
16 May 2023	5.25	–	5.55	5.59	5.64	5.25	4.63	4.05	4.12	-82
17 May 2023	5.25	–	5.54	5.59	5.65	5.25	4.67	4.08	4.16

Actual RBA interest rates are offered by excel sheets and impossible to post. Bank Bills are offered but bank bills are not perfect to AUD trades as much as daily RBA interest rates.

BBSW 10 day history

DATE	1 MONTH	2 MONTH	3 MONTH	4 MONTH	5 MONTH	6 MONTH
15 MAY	3.8188	3.8596	3.9122	3.9890	4.0300	4.0900
14 MAY	3.8199	3.8522	3.8959	3.9529	4.0000	4.0413
11 MAY	3.8100	3.8400	3.8850	3.9342	3.9800	4.0200
10 MAY	3.8087	3.8400	3.8743	3.9200	3.9777	4.0117
09 MAY	3.8051	3.8449	3.8774	3.9334	3.9783	4.0265
08 MAY	3.8207	3.8545	3.8759	3.9336	3.9783	4.0237
07 MAY	3.8249	3.8500	3.8761	3.9305	3.9800	4.0200
04 MAY	3.8150	3.8400	3.8715	3.9018	3.9450	3.9918
03 MAY	3.8200	3.8433	3.8720	3.9246	3.9700	4.0117
02 MAY	3.8385	3.8450	3.8740	3.9400	3.9850	4.0456

Brian Twomey

EUR/USD V DXY 1999 – 2023

The 2008 market crash as I stated a million times was not a crash. From the 2015 EUR/JPY study, Regression Statistics for 2007 clearly reveal EUR/USD and EUR/JPY traded to the massive tops and was on its way to a massive fall while USD/JPY was on its way to a massive rise. Not 1 pip for EUR/USD and EUR/PY longs existed as both traded to extreme tops while USD/JPY traded to extreme bottoms. USD/JPY at extreme bottoms is the same as saying DXY traded to extreme bottoms.

Second, note the EUR/USD and DXY relationship at 2005, 2006 and 2007. Year 2005 peaked at 1.0769, dropped to 1.0419 in 2006 and rose again in 2007 to 1.0779. Every time EUR/USD Vs DXY achieved a relationship at 1.0700, a giant drop happened the next year. Year 2014 saw 1.0800’s then dropped to 1.0529 for 2015.

The EUR/USD Vs DXY relationship appears to top at high 1.0600’s and 1.0700’s every time since 1999 then drops. The 2007 reading at 1.0700’s was possibly an early warning to a giant move in preparation. If Housing wasn’t reported as a travesty, years 2008 and 2009 would’ve traded as an orderly market.

For Housing, vew Jimmy Carter’s 1978 Community Reinvestment Act and compare it to Clinton 1995 Community Reinvestment Act. Clinton relaxed lending standards for House purchases so anyone with a paycheck and job a Mc Donalds could own a house. The loans for house purchases were worthless and nobody backed the loans. The result was a house crash to prices. The house crash was already ordered to happen as loans became more and more worthless.

Inside the EUR/USD V DXY numbers is the price positions. The true position of EUR/USD Vs DXY is EUR/USD as a higher exchange rate than DXY. This is the case for all European instruments Vs the United states and USD. DAX contains a higher price than Nasdaq, Brent oil has a higher price than WTI. Most importantly, Ester at 3.14 trades below Fed Funds at 5.08.

The natural historic positions of EUR/USD V DXY is EUR/USD trades at a 1.0000 while DXY trades 0 point. A factor inside the numbers is also the amount of times EUR/USD Vs DXY crossed over each other and switched positions. Since 2008, the switch happened 1 time in June 2022 at EUR/USD and DXY at 1.0500’s. The result was 1000 pip move as EUR/USD traded to 0.9500’s and DXY to 114.00’s.

Years 1999 to 2000 was also years of crossovers as EUR/USD crossed below DXY. Year 1999 began at 1.0557 in the EUR/USD V DXY relationship and dropped to 1.0176 in year 2000.

Overall since 1999, the comfortable and trade range for EUR/USD V DXY sits at 1.0700’s to high 1.0400’s to 1.0300 and 1.0500’s represents the middle position. Current 1.0500’s is viewed as DXY assuming the historic 0 point role and EUR/USD remains a 1 point currency.

The Historic Numbers

Years 2008 ad 2009 were recorded for January and December to observe the total effects to EUR/USD V DXY as 2008 and 2009 were outlier trade years.

1999 = 1.0557
2000 = 1.0176
2001 = 1.0201

2002 = 1.0406
2003 = 1.0278
2004 = 1.0609

2005 = 1.0769
2006 = 1.0419
2007 = 1.0779

2008 January = 1.1144
2008 December = 1.0654

2009 January 1.1007
2009 December = 1.1219

2010 = 1.1043
2011 = 1.0701
2012 = 1.0498

2013 = 1.0618
2014 = 1.0800
2015 = 1.0529

2016 = 1.0363
2017 = 1.0347
2018 = 1.0591

2019 = 1.0509
2020 = 1.0447
2021 = 1.0610

2022 = 1.0445
2023 = 1.0620

Brian Twomey

EUR/USD Vs DXY Levels

Note 1.1134 Vs DXY 99.84 as EUR/USD contains a vital break and the 50 year monthly average to DXY.

EUR/USD 1.0904 Vs DXY 102.14

EUR/USD 1.0932 Vs DXY 101.85

EUR/USD 1.0990 Vs DXY 101.27

EUR/USD 1.1134 Vs DXY 99.84

EUR/USD 1.1277 Vs DXY 98.40

EUR/USD 1.1421 Vs DXY 96.96

Brian Twomey