GBP/USD yesterday traded to 1.2679 highs and 54 pips to the 1.2733 target. GBP/USD yesterday traded 79 pips and the vast majority traded for the CPI event. If ever irrelevance existed in markets, yesterday’s CPI was front and center as GBP/USD would’ve traded 70 ish pips regardless to CPI. Today’s BOE is just as irrelevant as CPI yesterday as GBP/USD trades another 70 ish pip day.
Monetary Policy and any central bank position is found inside the money supply vs interest rate relationship. Inside this relationship is found GDP and Inflation.
The advantage today is the same as yesterday for GBP/USD. GBP/USD yesterday was oversold at 1.2601 and longs were automatic. GBP/USD bottoms today in the vicinity of 1.2554 and 1.2570. Longs are the only way for GBP/USD to travel. The 1.2733 target is not expected to hit today.
Our trades are pre factored for multiple longs and shorts per currency and per financial instrument so BOE is much more irrelevant than CPI.
EUR/NZD achieved targets at 1.7296 and 1.7273 from 1.8000’s. The EUR/NZD trade is complete. GBP/NZD target at 1.9733 and 1.9680 traded to lows at 1.9789 and 56 pips to target from highs at 2.0300’s.
USD/JPY from Sunday: targets 133.65. USD/JPY traded to 133.88. Highs achieved 135.46. The USD/JPY strategy remains short only to target 128.27 and 122.00 longer term on a break of 126.00. Short strategies contain another 500 pips.
EUR/AUD traded to 1.6134 lows. EUR/AUD began the week at 1.6300’s. Watch for the EUR/AUD break below 1.6116 then first target at 1.6043 and much lower to 1.5900’s and 1.5800’s. EUR/AUD 11 trade days ago, reached 1.6785. Shorts from 1.6700’s runs +600 pips.
And waiting on GBP/AUD to break 1.8553. GBP/AUD correlations are running on all cylinders to match wide range currencies.
GBP/AUD Vs EUR/AUD +98%, GBP/AUD Vs EUR/NZD +89%, GBP/AUD Vs GBP/NZD +97%, GBP/AUD Vs GBP/USD +97%. GBP/AUD Vs AUD/USD -21%.
EUR/USD same old weekly story to relevant trade levels: 1.0834, 1.0958, 1.1137. Above 1.1137, EUR/USD hits a steel wall at 1.1193 and 1.1199. Informed weeks ago to EUR/USD impending dead range movements.
EUR/USD is also running on all cylinders to Correlations to EUR cross pairs. EUR/USD Vs EUR/CAD +99%, EUR/USD Vs EUR/NZD +96%, EUR/USD Vs EUR/AUD +97%, EUR/USD Vs EUR/JPY +87%.
EUR/JPY and GBP/JPY correlations to EUR/USD and GBP/USD are holding downside progress. Once EUR/JPY breaks 146.08 and GBP/JPY 166.50 then both will gain speed to downside progress and targets.
GBP/USD also contains the same weekly level story as 1.2348, 1.2602 and 1.2863. Upon GBP/USD’s target completion at 1.2733, the next big line is located at 1.2753. Once 1.2733 achieves destination then short quickly for extra pips.
Overall currency markets entered into tiny range markets. Next week will trade as this week and 2 weeks ago.
Brian Twomey
BRIAN TWOMEY ON TRADING 