FX Weekly and USD/EM

GBP/USD at 1.2651 highs Friday traded within 82 pips to the 1.2733 target, EUR/NZD within 200 pips to the 1.7200 target and EUR/AUD traded to 1.6305 lows and on the way to targets at 1.6043, 1.5952, 1.5878 and 1.5792.

The question to Time is never on our side as all currencies trade to price settlements is the same axiomatic dictates of markets as prices must fly to trade to normalization. Price settlement was viewed as normal 300 pip ranges within the confines of averages. But normalization at the 2 year cycle end experiences dramatic moves from currencies not at the target and normalization point.

EUR/NZD for example traded 600 pips lower in 7 trade days, GBP/NZD 445, GBP/AUD 430 pips, EUR/AUD 480. USD/CAD at 1.3373 Vs GBP/USD at 1.2627 or a 746 pip spread already informed to normalization and a slowdown period ahead. Same for the EUR/USD Vs DXY relationship.

In September 2022, EUR/USD Vs DXY achieved its maximum peak distance at 1935 pips when DXY traded 114.00’s to EUR/USD 0.9540. The EUR/USD Vs DXY relationship today was slashed by 1/2 to 889 pips at EUR/USD 1.1017 to DXY 101.28. EUR/USD V DXY each traveled 241 pips in each of the 8 months since September’s Peak.

USD/JPY Vs JPY Cross Pair Correlations

GBP/JPY and EUR/JPY hold the same correlation positions as last week. EUR/JPY runs +87% correlations to EUR/USD and -12% to USD/JPY while GBP/JPY correlates to GBP/USD at 84% and barely positive to USD/JPY at +0.007. USD/JPY fully owns AUD/JPY at +87%, NZD/JPY at +79% and CAD/JPY at +98%.
USD/JPY Vs CAD/JPY is perfectly normal at +98% as USD/CAD correlates to CAD/JPY at -55%. Perfectly normal as USD/CAD and CAD/JPY are near perfect opposite currencies.

EUR/JPY and GBP/JPY lack synchronization to JPY cross pair counterparts. A trade in EUR/USD and GBP/USD is the same trade as EUR/JPY and GBP/JPY.

The Week

USD/JPY begins the week just below its vital point at 134.81. USD/JPY ‘s downward path is clear to target 128.14 as USD/JPY sits above 126.04. For the week, USD/JPY targets 133.65.

Massive overbought GBP/JPY targets 164.34 and much lower on a break of 166.07. GBP/USD trades 1.2312 – 1.2596 – 1.2862 on a long only trade strategy. Current GBP/USD at 1.2600’s trades overbought from 1.2300’s.

EUR/USD trades the same points over last months as 1.0832 – 1.0958 – 1.1138. EUR/USD begins the week in a neutral position and we looking at longs from lower levels.

AUD/USD and NZD/USD massive overbought complies to overbought GBP/USD while GBP/USD’s perfect opposite, USD/CAD trades massive oversold.

DXY maintains the same position as deeply overbought from 102.00’s. No changes over last weeks.

GBP/AUD must break 1.8555 then 1.8364 to target 1.8200’s. EUR/AUD is the better and preferred trade rather than GBP/AUD as EUR/AUD only vital level is located at 1.6156.

GBP/CAD trades 100 pips from 1.6843 to 1.6945. Above 1.6945 targets 1.7101 and below 1.6843 targets many averages at 1.6600’s.


USD/CZK from 21.2240 drops to 21.2092 then long at 21.2092.
USD/PLN targets 4.2249 from 4.1587.

USD/BRL targets easily 5.0039 from 4.9514.
USDHUF targets 345.31 from 337.36

USD/RON targets 4.5092 from 4.4653.
USD/TRY target 19.3300.

Brian Twomey, for trades, contact brian@btwomey.com