FX Weekly: DXY, EUR/USD and EUR Cross Pairs

DXY continues to dictate currency and all market prices. The rise to 114.00’s offers vital average supports every 100 pips from 113.00 to 89.00’s. DXY closed at 112.17 and trades between 113.15 above and 112.10 below. Ranges trade roughly 100 pip intervals from the vital average to 100 pip targets above.

Next targets above are located at 115.50, 116.27, 117.04, 117.81 or every 77 pips.

Downside targets begin at 110.90, 110.13, 109.36, 108.60 or every 77 pips.

Downside targets assume an average break then trade between 2 most vital averages.
DXY trades 57 pips per day. DXY at 57 pips per day has been a constant within DXY’s history since at least 2016. The Fed may raise or lower interest rates to any desired level and DXY will remain constant at 57 pips per day. At 57 pips per day is enough to hold Commodities and SPX from trading to massively exorbitant levels.

The range reported to SPX performs exactly as DXY dictates to points per day. Gold best days trade 20 and 30 points and 50 to 80 point weeks while WTI and Brent trades its best weeks at 6 and 8 point ranges and 2 to 4 point days.

Not constant for Fed interest rate changes are every currency, stock market index and associated financial instrument on the planet as all must massively adjust pips per day and weekly ranges.

GBP/USD at 56 pips per day is the best currency to hold constant to DXY, followed by EUR/USD at 49 while AUD/USD at 32 and NZD/USD at 28 suffer the effects to allowable pip movements.

The overall constant to currencies and markets is an award winning simple math and Statistics book never written.

Overall markets are dependent on DXY for every move.

The Week

USD/CAD and USD/CHF begin the week overbought while USD/JPY trades in ranges as DXY from 144.36 to 147.10.

Currency markets problem this week is lack of uniformity among anchor and cross pairs.

AUD/USD and NZD/USD trade deeply oversold to fairly neutral EUR/USD and GBP/USD.

EUR/CAD trades deeply overbought to neutral GBP/CAD and oversold AUD/CAD and NZD/CAD.

EUR/JPY trades deep overbought to massively oversold NZD/JPY, Neutral CAD/JPY, and Neutral AUD/JPY. Nothing special exists to GBP/JPY however watch 160.63 break lower to take down all JPY cross pairs.

AUD/CHF, CAD/CHF and NZD/CHF trade oversold to neutral EUR/CHF and GBP/CHF.
Overbought EUR/AUD to neutral GBP/AUD.

GBP/NZD and EUR/NZD aligned as both overbought.

As GBP/USD and GBP cross pairs begin the week at neutral, EUR/USD and EUR cross pairs must lead the way to all categories of cross pairs.

EUR/USD

EUR/USD last week achieved 0.9782 target. This week’s trade runs as: Long 0.9749 and 0.9744 to target 0.9979. Then short 0.9979 to target 0.9886. Higher for EUR/USD must break 1.0057

Trade Rankings

EUR/USD, AUD/USD, EUR/AUD, EUR/CAD, EUR/NZD, USD/CAD, NZD/USD, EUR/JPY, AUD/JPY, NZD/JPY, AUD/CHF, NZD/CHF, CAD/CHF, USD/JPY, CAD/JPY.

Least favored JPY cross pair is CAD/JPY then AUD/JPY. GBP/USD shorts are favored as well as GBP cross pairs however with deep caution.

SPX Weekly Trade

Long above 3661.targets 3759.79 and bottom side target 3562. 90.

Brian Twomey

FX Next Week and USD/BRL

EUR/USD target this week at 0.9782 traded to 0.9750. EUR/USD must break 0.9773 to target 0.9782. Friday’s close just below 0.9773 targets next week’s range from 0.9773 – 0.9928. Big break for higher is located at 1.0082 to target easily 1.0159.

EUR/USD 1.0082 derives from a significant 78 pip drop from 1.0160 at week’s beginning.

Massive overbought USD/CHF joins overbought counterparts, USD/CAD and USD/JPY. USD/CHF targets next week 0.9780 then 0.9756. USD/CHF runs about 100 pip difference from last week’s 0.9685. USD/CHF must break 0.9828 to target 0.9780 then 0.9756.

DXY at 114.75 highs this week rose from 112.54 to travel another 121 pips and to drive currency and all market prices. DXY next week ranges from 115.30 to low 112.00’s and no changes to ranges from past months.

DXY at 200 ish pip ranges offers USD and non USD currencies 200 to 250 pip weeks. EUR/USD for example traded 218 pips this week, USD/CAD 269 and USD/JPY at 172.

The overall trade strategy remains long EUR/USD and non USD and short USD to USD/JPY, USD/CHF and USD/CAD. Strategies were imposed and viable as best approach due to massive overbought DXY and trading to exorbitant levels.

Weekly trades normally contain multiple shorts and longs but DXY at 114 offers to wide to divergence to short EUR/USD and Non USD. The only trade and direction for EUR, GBP, AUD and NZD is up and much higher. Upon normalization, multiple longs and shorts begin again.

GBP/USD, GBP/CHF and GBP/JPY contain a long way to travel to target 1.1089, 1.0830 and 158.00’s. GBP and cross pairs are best profit trades next week and beats EUR/USD.

GBP/NZD for higher targets above 1.9166, trades below and remains deeply divergent to massive overbought EUR/NZD. GBP/NZD and 1.9166 decides as EUR/NZD trades miles above vital 1.6602. Divergence could last another few weeks easily. Best trade is EUR/NZD as short strategy.

GBP/AUD trades oversold to overbought EUR/AUD. EUR/AUD traded 280 pip higher this week to 1.5002 from 1.4723 or roughly 70 pips per day. EUR/AUD 1.4841 ends the divergence to GP/AUD as GBP/AUD trades below 1.7132.

AUD/USD and NZD/USD at deep oversold targets easily 0.6600’s and NZD 0.5800’s. AUD/CHF, NZD/CHF, EUR/CHF and GBP/CHF offers additional longs as complement trades and companion currencies to anchor pairs.

USD/JPY maintained 143.00’s to 146.00’s this week and offers shorter 200 pip ranges next week from 144.00’s to 146.00’s. USD/JPY trades and tracks perfectly to DXY.

GBP/JPY higher must break 160.00’s and trades deeply oversold. Higher for AUD/JPY and NZD/JPY must break 93.56 and 83.99. EUR/JPY and CAD/JPY trade above 139.42 and 105.01.

Note the wide variance to EUR/NZD Vs GBP/NZD, JPY cross pairs, EUR/AUD Vs GBP/AUD. DXY is the problem to cause market abnormalities due to the wide divide from overbought USD and oversold NON USD.

Currency cross pairs rectify to trade consistent when DXY trades lower and compresses the wide USD division.

Best trades over next few weeks are the majors as EUR/USD, GBP, AUD, NZD and USD/CAD, USD/JPY.

Brazil Elections and USD/BRL

Brazil’s President Bolsonaro is up for reelection this Sunday against far left globalist and former president Sa Silva. USD/BRL at 5.37 63 trades massive overbought as all EM currencies as USD/EM. USD/BRL targets 5.2682 easily and short rally trade strategy.

Brian Twomey

SPX Monthly Average Data: 2022 to 2012

3955.00,4130.29,3785.38,4132.15,4131.93,4530.41,4373.79,4515.55,4766.18,4567.00,4605.38,4307.54,4522.68,4395.26,4297.50,4204.11,4181.17,3972.89,3811.15,3714.24,3756.07,3621.63,3269.96,3363.00,3500.31,3271.12,3100.29,3044.31,2912.43,2584.59,2954.22,3225.52,3230.78,3140.98,3037.56,2976.74,2926.46,2980.38,2941.76,2752.06,2945.83,2834.40,2784.49,2704.10,2506.85,2760.17,2711.74,2913.98,2901.52,2816.29,2718.37,2705.27,2648.05,2640.87,2713.83,2823.81,2673.61,2647.58,2575.26,2519.36,2471.65,2470.30,2423.41,2411.80,2384.20,2362.72,2363.64,2278.87,2238.83,2198.81,2126.15,2168.27,2170.95,2173.60,2098.86,2096.96,2065.30,2059.74,1932.23,1940.24,2043.94,2080.41,2079.36,1920.03,1972.18,2103.84,2063.11,2107.39,2085.51,2067.89,2104.50,1994.99,2058.90,2067.56,2018.05,1972.29,2003.37,1930.67,1960.23,1923.57,1883.95,1872.34,1859.45,1782.59,1848.36,1805.81,1756.54,1681.55,1632.97,1685.73,1606.28,1630.74,1597.57,1569.19,1514.68,1498.11,1426.19,1416.18,1412.16

Brian Twomey

SPX: Short and Long Term Averages

SPX trades between 2 vital averages at 3774.69 to 3534.40.

Below 3534.40 targets the 5 year average at 3367.25 then 3193.52. Above 3774.69 confronts 4121.26 and 4316.71 then on the way to 4511.52 and 4598.46. At 4500’s is top and maximum top range.

Averages at 4121.26 and 4316.71 trade deep oversold Vs slight overbought at the 10 year average at 2676.55. Oversold short averages and overbought long term forces SPX into range trades.

Massive hurdles exist at 3774.69, 3731.00, 3716.97, 3822.61 and 3931.81. Then 4034.96, 4053.10 and 4121.26 at the average.

Shortest range is located from 3622.93 to 3716.97 and 3731.00, 3822.61.

Longer term range 4316.71 to the 5 year average 3367.25. Nothing exists to trade long term targets as accomplished in many previous SPX posts.

SPX within ranges translates to all stock market indices as all are members of the same asset class and all trade in unison to each other. Stock index averages are slow movers and don’t change fast or very much over time.

SPX overall trades 200 point weeks over past months. Last week SPX traded 259 points and 283 for the previous week. Current 200 point weeks factors to 40 and 50 point trade days.

The driver to SPX is DXY as DXY trades wider ranges than SPX and this is the correct manner of trade for SPX to underperform DXY.

Brian Twomey

Weekly Trades: SPX, WTI, Brent, XAU, DAX

SPX

 Long above 3778.91 to target 3947.53

 Short 3947.53 to target 3908.62

Short below 3778.91 to target 3610.28

 Long 3610.28 to target 3649.20

WTI

 Long above 82.45 to target 88.02

Short 88.02 to target 86.74

 Short below 82.45 to target 76.87

 Long 76.87 to target 78.16

 Brent

 Long above 89.55 to target 94.77

 Short 94.77 to target 93.57

Short below 89.55 to target 84.32

 Long 84.32 to target 85.53

XAU/USD

 Long above 1664.01 to target 1695.03

Short 1695.03 to target 1687.87

 Short below 1664.01 to target 1632.96

 Long 1632.96 to target 1640.13

 DAX

 Long above 12560.21 to target 13016.01

 Short 13016.01 to target 12940.05

 Short below 12560.21 to target 12104.40

 Long 12104.40 to target 12180.37

Brian Twomey

FX Weekly: Short USD, Long EUR/USD

Overall drivers to currency markets are anchor pairs as well as 5, 10 year and longer term averages. On big trade days such as CPI and Fed interest rate releases, the anchor currencies are first to respond and easily outperform cross pairs. Cross pairs are not only secondary to responses but the trade reaction is not seen sometimes until the 2nd day of the release. The last CPI release was the perfect example.

On big trade days, the best pairs to trade for most profit are EUR/USD, GBP/USD, AUD/USD, NZD/USD Vs USD/CAD and USD/JPY. Overall best are EUR/USD, GBP/USD, USD/JPY and USD/CAD. Preeminent cross pair trades are JPY as elite to most pip moves.

EUR/USD and GBP/USD as wider ranges to AUD/USD and NZD/USD dictate pip movements. EUR/USD and GBP/USD trade more pips per trade day than AUD/USD and NZD/USD. For GBP/USD Vs USD/CAD is a 50/ 50 proposition.

Certain days GBP/USD trades more pips than USD/CAD while other days, USD/CAD leads the way to most pips. On rare days, each trades the exact same amount of pips or in extremely close proximity.

Currencies trading normally over past months as follows: EUR/AUD, EUR/JPY, EUR/NZD, GBP/AUD, EUR/CAD and USD/CAD. Trading normally to daily trades in terms of entries and targets traded perfectly and roughly 100 pip days. GBP/AUD’s 400 pip drop on Friday eliminates normality.

5 Year Averages

DXY trades 1800 pips above its 5 year average and 1700 pips from the 50 year monthly average while USD/JPY trades 3100 pips from its 5 year average at 111.85.

USD/CAD trades 300 pips from its 5 year average at 1.2900’s and 1100 pips from the 10 year at 1.2400’s. EUR/USD trades 1600 pips from its 5 year average at 1.1400, GBP/USD 2200 pips from 1.3100, AUD/USD 700 pips from 0.7200’s and NZD/USD 1000 pips from 0.6700’s.

EUR/USD from March 1985 lows and monthly averages at 0.6500’s to 1.5700 highs in July 2008 contains a mid point at 1.1152.

The week

Trades this week are predominately one way as USD shorts to USD/CAD and USD/JPY while long GBP/USD, EUR/USD, AUD/UD and NZD/USD. Targets for EUR, GBP. AUD and NZD leave all currencies in deeply oversold territory so no shorts are possible.

Trade Rankings

EUR/USD, AUD/USD, NZD/JPY, NZD/USD, USD/CAD, AUD/CHF, EUR/CAD, NZD/CHF, CAD/CHF, USD/JPY, EUR/JPY, AUD/JPY, EUR/NZD, CAD/JPY, EUR/AUD.

USD/CHF

Massive overbought USD/CHF levels on the way down: 0.9779, 0.9751, 0.9723 and 0.9695 target.

EUR/USD Weekly Trade

Long 0.9638 and 0.9634 to target 0.9782. No short is possible as continuation trades.
JPY Cross Pairs

NZD/JPY and GBP/JPY earn rankings as most oversold. Higher for GBP/JPY must break 162.00’s. GBP/JPY trade to 160.00’s and 161/;s normalizes current price from 155.00’s.
CAD/JPY is least favored then AUD/JPY and EUR/JPY.

USD/JPY weekly range trades in wide intervals from 143.00 to 146.00’s.

EUR/NZD V GBP/NZD

Massive divergence remains yet widened from last week as EUR/NZD trades massive overbought against its vital point at 1.6500’s while GBP/NZD trades severely oversold and big break for higher at 1.9200’s.

May take weeks for EUR/NZD and GBP/NZD to align properly.

EUR/AUD Vs GBP/AUD

EUR/AUD trades just below vital 1.4831 vs deeply oversold GBP/AUD at 1.7200’s.
CHF Cross Pairs

CHF cross pairs all align as deep oversold and ready to travel higher. GBP/CHF and EUR/CHf are first priority then NZD/CHF, AUD/CHF and CAD/CHF.

USD/CAD

USD/CAD not only trades overbought but 5, 10 and 14 year averages achieved targets at 1.3588, 1.3400 and 1.3200’s. Good target for the week is 1.3399 and on the way to 1.3200’s. USD/CAD short is the only trade available.

CAD Cross Pairs

Best trades long: GBP/CAD, NZD/CAD and AUD/CAD. Nothing exciting to EUR/CAD this week.

NZD Vs AUD

Both categories trade oversold as NZD/USD and AUD/USD and cross pairs. AUD/NZD trades overbought and targets 1.1284.

Brian Twomey

FX Next Week

DXY broke the 110.78 last high to trade 111.83 and continues the rampage far above 40 and 50 year monthly averages. This is an extraordinary event. DXY’s fall will be more extraordinary.

EUR/USD as written achieved 1.0050 from 0.9965 and +85 pips while shorts completed at 1.0028. Total 107 pips done before the Fed Decision.

EUR/USD ranges for next week: 0.9926 to 0.9801. Big break for higher now 1.0179.

USD/JPY as written for this week: USD/JPY maintains 142.69 to 145.47 in massive ranges. Target for the week is 141.00’s. USD/JPY was headed to 141.00’s regardless of the Fed, intervention and whatever hot air is wasted to outside market events.

USDJPY 145.83 – 140.64 or 519 pips. JPYUSD 0.0068572 – 0.0071102 or 253 pips While USD/JPY dropped 519 pips, JPY/USD rose 253 pips.

This is what separates JPY from remainder currencies. USDJPY moves 2 X to JPYUSD while no other reciprocal arrangement does this.

Bloomberg reports USD/JPY rose 20% this year. All it takes is 15% within 1 year for Treasury to declare Currency Manipulation. USD/JPY’s move avoided declaration.

USD/JPY’s drop lower was a correction from overbought until 137.85 breaks lower. USD/JPY is now oversold and normal is located at 143.36.

Massive oversold GBP/JPY must break 162.81 to travel higher, EUR/JPY 140.04, AUD/JPY 94.47, NZD/JPY 84.73, CAD/JPY 105.34 and CHF/JPY 143.13.

Inflation

Inflation rates achieved 10% in 1979 and 14% in 1980 to Fed Funds at 8% in 1979. By January 1981, Fed Funds rose to `19% and Inflation dropped to 11% from 14% highs. Not until January 1983 did Inflation achieve 3.8% and Fed Funds at 8%. Took Volker 3 years to drop Inflation to low levels on a massive Fe Funds rate rise.

While Volker and 1979 is today’s benchmark model, Inflation in 1974 achieved highs from 9% to 12% while Fed Funds rose to 12.92% or almost 13%. Only examples to Inflation years at 8% and above are found in 1951, 1947, 1943 -1942, 1916 to 1920, 1922, 1932 to 1933.

GDP began Volker’s 1979 term at 3.2% and dropped to negative 0.5% in 1980 then 2.5% in 1981 and -1.8% in 1982.

No changes next week to long EUR/USD and GBP/USD while short USD/JPY and USD/CAD. GBP cross pairs as best profit trades: GBP/CHF, GBP/JPY and GBP/CAD. No thrills to GBP/AUD and GBP/NZD.

EUR cross pairs remain best trade options to include EUR/NZD and EUR/AUD.

USD/CHF trades severely overbought and targets 0.9685. Overall USD/CHF trades neutral to medium and long term averages as a big CHF move is not seen anytime soon. USD/JPY and USD/CAD are quite different as both follow DXY.

Brian Twomey

FED Funds and the State of Trading

Fed Funds at current 2.33 rises 12 points per 25. So a 50 point raise count 24 to 2.47 and 75 count 36 to 2.69. Fed Funds is called the effective rate and most important because the Fed and Central banks deal not from the headline but the effective rate and associated rates to the effective rate such as Commercial Paper.

See EUR/USD Weekly Trade. Long 0.9965 to target 1.0074. Low 0.9965, highs 1.0034, running +69 pips.

Here’s 2.33 Vs 40 and 50 year monthly averages

FED Funds 2.33 & 40 &50 Year Monthly Averages V DXY

50 X 2.33 = 116.50

49 = 114.17

48 = 111.84,

47 = 109.51

46= 107.18

45 = 104.85

44 = 102.52

43 = 100.19

42 = 97.86 = 50 Year average

41 = 95.53 = 5 Year Average

40= 93.20

Brian Twomey

FX Weekly

EUR/USD expected close at 0.9986 actual was 1.0011. Past close price forecasts always landed within a 20 to 40 pips range.

Nothing changed since Thursday as EUR/USD trades 0.9983 to 0.9862 or 0.9983 to 1.0105. Here’s Thursday: 1.0110 to 0.9986 and 0.9986 to 0.9863.

The Trade: Long 0.9967 and 0.9959 to target 1.0074. Must cross 0.9997, 1.0012, 1.0027, 1.0042, 1.0057, 1.0072, 1.0087. Short 1.0074 to target 1.0028.

Target is just under 1.0105 and entry just under 0.9983.

JPY cross pairs are all oversold but 2 factors at play. GBP/JPY trades below vital 163.33. GBP/JPY below forced JPY cross pairs lower and into current oversold for the week. GBP/JPY above 163.33 forces JPY cross pairs higher. Strategy is short for most profits.

Trade Rankings’

EUR/USD, EUR/JPY, USD/JPY, EUR/NZD, AUD/USD, EUR/AUD, NZD/USD, USD/CAD, AUD/CHF, NZD/CHF, CAD/CHF, CAD/JPY, AUD/JPY, NZD/JPY, EUR/CAD.

Note JPY cross Pairs at last place. EUR/JPY maintains best to JPY cross pairs because EUR/JPY is the same exact currency as USD/JPY. Both trade almost pip for pip in unison. A short for EUR/JPY is a short for USD/JPY and vice versa.

USD/CAD sits massive overbought to oversold CAD/JPY and CAD/CHF. Good 3 trades is short USD/CAD and long CAD/JPY and CAD/CHF.

USD/JPY maintains 142.69 to 145.47 in massive ranges. Target for the week is 141.00’s.
EUR/NZD trades severely overbought above vital 1.6439 while GBP/NZD trades below 1.9183. Divergence is wide. EUR/NZD is the better trade short.

EUR/NZD at 1.6703 and GBP/NZD at 1.9058 spreads 2300 pips. Correct for normality is 2600 which says a big move ahead.

Same story to GBP/AUD and EUR/AUD divergence as EUR/AUD trades above 1.4801 and GBP/AUD below 1.7274. The spread is 2000 pips and low as normal exists at 2600 pips.

AUD/USD and NZD/USD are deeply oversold as well as AUD/CHF and NZD/CHF. NZD/CHF and NZD/USD are better longs trades.

EUR/CAD closed at 1.3274 and perfectly on the vital high/low point. Informs how perfectly are markets statistically.

GBP/CAD is the better long trade as EUR/CAD for a weekly trade is untouchable. The 24 hour trade is the better option for EUR/CAD.

Plus view EUR/CAD 1.3274 Vs USD/CAD 1.3263. The crossover is upon us.
USD/CAD 1.3263 Vs GBP/USD 1.1415 and 1848 pips is at far extremes to USD Vs Non USD.

GBP/USD at the close 1.1415 trades 1695 pips from its 5 year average at 1.3110. EUR/USD at 1.0011 trades 1440 pips from its 5 year average at 1.1451, AUD/USD at 500 and NZD/USD at 800 pips.

DXY trades 1400 pips form its 5 year average and 1300 pips from the 50 year monthly average while USD/JPY trades 3100 pips from its 5 year average at 111.85.
USD/CAD trades 300 pips from its 5 year average at 1.2900’s and 800 pips from the 10 year average at 1.2400’s.

USD Vs non trade at enormous extremes. More pertinent to the week is ranges are far wider than normal. This means more pips per trade into the 200 and 300’s.

GBP Trade Ranks

GBP/USD, GBP/CAD, GBP/AUD, GBP/CHF, GBP/NZD, GBP/JPY.

While trades are factored for GBP/JPY and GBP/NZD, last on the rankings due to positions from averages and divergence to EUR/NZD and JPY Cross Pairs.

4 best are GBP/USD, GBP/CHF, GBP/CAD and GBP/AUD due to oversold.

Brian Twomey and brian@btwomey.com

Brian Twomey and Subscribers

My posts in 4 straight weekends achieved front page on fxstreet and investing dot com views skyrocketed in the 1000’s. Overall, friends, readers, followers are in the multi, multi 1000’s. Most are 10 and 15 year followers.

No mystery to delivering profits continuously over many years and showed amazing trades and results.

For 25 cents more, all this buys is a cup of coffee in Barcelona.

I’m severely down on subscribers as a few traders are off doing special projects outside markets and vacations.

Part of subscriber money goes to assist others in trouble with life circumstances. Its quite astounding what I’ve done over the years. God knows.

I’m posting this week for my blog only for long time friends and followers. Subscribers maintain this blog and continued writings. If no subscribers then no writings. Nothing more I can do as we are forced to go private.

I don’t know this computer nor will I spend 24 /7 on twitter, social media and you tube. If I had the right equipment and knew how to use it, so so much I wanted to show to currencies, markets and trading.

I’ve been at this thing for 18 years and assisting traders since the 2012 trades. I held out hope from Peter and Tommy to see the inside to markets and trading but this hope died long ago as my friends don’t give 2 shoots.

The saving grace was never to become a member of the cabal of collusion that exists. This collusion is much deeper than I ever thought before. Its an Iron Triangle where only the insiders are members. Probably exists in the class of professionals.

Weekly post to follow

Brian Twomey

FX Next Week

Tuesday’s Inflation story was an anchor pair event as DXY traded 213 pips then EUR/USD and GBP/USD matched DXY at 213, USD/CAD 221 and USD/JPY at 308 pips. NZD/USD traded an extraordinary 175 pips to AUD/USD at 145.

Missing in action was cross pairs as EUR/AUD traded 140 pips, GBP/JPY 185, EUR/NZD 94, EUR/CAD 107, EUR/JPY 139 and 148 for GBP/AUD.

Cross pairs traded barely above 1/2 DXY ranges as compared to anchor pairs EUR/USD, GBP/USD. GBP/AUD and EUR/JPY were Wednesday’s range winners at 172 and 218 pips.

Dow Jones

The Dow dropped 1000 points. On a 31,000 price, 1000 points lacks classification to a move. The Dow must travel at least 5,000 points to consider meaningful significance. The Dow at 1000 points is a media story rather than a market event.

Next Week

EUR/USD expected close on Friday at 0.9986 then ranges from 1.0110 to 0.9986 and 0.9986 to 0.9863. Next week’s long target is 1.0110. Deeply oversold EUR/CHF at 0.9600’s lies just below EUR/USD’s price and holds as EUR/USD supports.

Much higher EUR/USD must clear 1.0233 to target easily 1.0300’s.

DXY is expected to trade from 110.64 to 107.13. At 110.64 remains below the 110.78 highs from 40 and 50 year monthly averages while 107.13 breaks to new lows.

The overall market story is EUR/USD Vs USD/JPY and DXY. USD/JPY serves as the best proxy for DXY. Both are the same currencies and both massive overbought, short and long term.

Expected close for USD/JPY at 142.27 then means short next week to target 140.00’s and 139.00’s. Any price above 142.27 is a gift for extra pips to shorts in the vicinity of 143.64.

GBP/USD at the 1.1576 expected close then ranges next week from 1.1380 to 1.1576 and targets just below 1.1770’s. GBP/CHF at 1.1100’s holds GBP/USD as supports.

AUD/USD is running into range problems. Tuesday’s 145 pip day was an oversold story while last days, AUD/USD traded 50 pip days. AUD/USD’s magic number for higher is 0.6930.

Massively oversold NZD/USD targets next week around 0.6165 on entry anywhere. NZD/USD is the best trade rather than AUD/USD as AUD/USD will underperform NZD/USD.

GBP/JPY 163.35 and EUR/JPY 139.76 hold JPY cross pairs from the big drop. Add USD/JPY at 136.00’s.

JPY cross pairs began the week deeply overbought and remain deeply overbought for next week on a short only strategy.

To 24 Hour trades was added EUR/CHF and GBP/CHF for a 14 currency pair total. EUR/CHF was added to weekly trades for a 22 currency pair total.

For trades, contact at btwomey.com

EUR/CAD close at 1.3045 may not trade which means EUR/CAD relegates again to last place in the trade rankings. Same story as last week. GBP/CAD so far is the better long trade for next week to target just under 1.5300’s.

EUR/NZD as written last week began the week overbought and traded higher this week. EUR/NZD trades in the stratosphere overbought. Good short trade to target 1.6400’s.

GBP/NZD at 1.9164 is do or die approach as 50/ 50 exists to guess longs or shorts. GBP/NZD last week was deeply oversold at 1.8900’s and traded 300 pips higher to 1.9200’s.

GBP/NZD Vs EUR/NZD extreme divergence existed to oversold GBP/NZD Vs overbought EUR/NZD. GBP/NZD resolution a 1.9164 may resolve the divergent problem for next week.

EUR/AUD 1.4771 holds EUR/AUD higher. Short next week at 1.4900’s to target low 1.4800’s. Not much excitement to EUR/AUD.

GBP/AUD is materializing as the better long trade to target middle 1.7100’s but like EUR/AUD no thrills exist to GBP/AUD.

Overall, expected is a normal trade week without violent swings.

Brian Twomey

Day Trades: EUR, GBP, JPY, EUR/JPY, GBP/JPY

The major problem to EUR/USD was seen from 40 and 50 year monthly averages but specifically the insight derives from day trades.

Top Side EUR/USD for today. 1.0147, 1.0153, 1.0159, 1.0166, 1.0172, 1.0179, 1.0185, 1.0192

Looks like yesterday? EUR/USD at a paltry 50 pips per day trades 6 and 7 pip spreads. This decreased spread is most compressed and never seen before.

Typical EUR/USD in past years dating to 10 and 18 years ago traded 75, 80 and 90 pips per day. This means EUR/USD spread 9, and 10 pips as follows based on today’s trade.
Topside: 1.0150, 1.0159, 1.0168, 1.0178, 1.0197, 1.0207, 1.0216.

At 50 pips offers roughly 100 pips per day assuming EUR/USD trades a full range Vs 80 pips per day at 160 pips. The central banks chopped off 60 ish pips per day to trade.
Opposite EUR/USD is DXY at 55 pips or 7 pips as follows for today’s topside: 108.07, 108.14, 108.21, 108.28, 108.35, 108.42, 108.49, 108.56.

DXY and EUR/USD has been trading 50 pip days for the last years. And this won’t change much in years to come.

GBP/USD Topside: 1.1719, 1.1726, 1.1733, 1.1741, 1.1748, 1.1756, 1.1763, 1.1771.
GBP at 7 and 8 pips trades its most compressed spread in many years.

Compare GBP/USD to its opposite USD/CAD. Topside as follows: 1.2989, 1.2997, 1.3005, 1.3014, 1.3022, 1.3030, 1.3038, 1.3047.

USD/CAD is trading rare days compared to GBP/USD by spreading 8 and 9 pips vs GBP/USD at 7 and 8 pips. Normally GBP/USD beats CAD by trading more pips per day.
GBP/USD yesterday traded 110 pips vs USD/CAD 82. This is typical in the GBP/USD and USD/CAD relationship. DXY traded 103 pips. Also common on any trade day.

AUD/USD and NZD/USD: The Constants

AUD/USD Topside today: 0.6879, 0.6883, 0.6887, 0.6892, 0.6896, 0.6901, 0.6895, 0.6910
AUD at 4 and 5 pips holds constant in past decades and will hold exactly in decades to come.

NZD/USD topside for today: 0.6134, 0.6137, 0.6141, 0.6145, 0.6149, 0.6153,0.6157, 0.6161

NZD 4 pips is also a constant. NZD never changed from past decades nor will ever change in decades to come.

USD/JPY

Now we arrive at constant change. USD/JPY traded from 59 daily pips to 72 and spreads 9 pips to beat EUR, GBP, AUD, NZD and CAD. For USD/JPY at 9 pips is extraordinary as I don’t remember 9 pips ever seen before.

Topside for today: 142.29, 142.38, 142.47, 142.56, 142.64, 142.74, 142.83, 142.92

USD/JPY should trade 50 pips to match EUR/USD and DXY. USD/JPY is the outlier to today’s markets but not an outlier compared to JPY cross pairs.

EUR/JPY Topside today: 144.30, 144.39, 144.48, 144.57, 144.66, 144.75, 144.84, 144.94
EUR/JPY matches USD/JPY exactly at 9 pips.

GBP/JPY however is the driving force to USD/JPY and JPY cross pairs as GBP/JPY trades 10 and 11 pip spreads. GBP/JPY must trade more pips than USD/JPY and JPY cross pairs as designed and never changed in past decades nor will ever change in decades to come.

Topside today. 166. $$, 166.77, 166.87, 166.98, 167.08, 167.19, 167.29, 167.40.
Currency pair pips and ranges contains a chain of command inside their own built in structure. Each pair was designed with their own ranges and spreads.

Every financial instrument on the planet operates exactly as currency pairs to pip spreads and ranges.

SPX for example is fairly constant at 20 points which means spreads at 5 points. Stock indices and commodities were designed to underperform currencies especially DXY. This is a constant to markets.

SPX yesterday traded 33 points to DXY 108 or 1/3.

GOLD for example is also fairly constant at 9 pips and 3 pip spreads.

WTI Oil and Brent trade 3 and 5 points per day or 1 and 2 point spreads.

Required is know the simple interest rate procedure then count on your fingers or use a calculator to factor day trades.

Brian Twomey

FX Weekly: EUR/USD, DXY, GBP, JPY

Severely overbought JPY cross pairs begin the week. USD/JPY adds to the ranks of overbought as a result of DXY trading near 40 and 50 year monthly averages.
The DXY venture began 16 months ago at 89.00 lows in May 2021 to travel to 110.00 highs. In 16 months, 12 monthly candles were solid green and one Doji at the vital 95.00 MA.

DXY supports are located next at 107.74, 106.20, 104.56, 103.74, 102.92, 102.66, 102.28, 101.36 and 100. DXY 109.59 becomes vital to trade higher to 110.00 and 111.00’s.
Overall DXY still trades in 100 and 200 pip ranges to inform currency market price moves won’t see violent up and down swings. DXY traveled higher from 89.00’s by 125 pips per month and this is what is expected long into the future.

Best trades for profits are EUR/USD and USD/JPY as EUR/USD trades massive oversold Vs richter scale overbought to USD/JPY. Best cross pairs are EUR currencies and JPY.
Overbought JPY cross pairs this week is expected about 200 pips lower. Trade order begins as GBP/JPY and EUR/JPY then CAD/JPY, AUD/JPY and NZD/JPY. JPY cross pair trades represent corrections from deep overbought until GBP/JPY breaks 162.63 and EUR/JPY 138.81.

Currency markets radically change trend when USD/JPY breaks below 136.00’s and EUR/USD above 1.0200’s.

GBP Trade Ranking

GBP/USD, GBP/JPY, GBP/AUD, GBP/CAD, GBP/CHF, GBP/NZD. All GBP currencies begin the week deeply oversold to include GBP/NZD. The GBP/NZD oversold problem is EUR/NZD trades massive overbought. EUR/NZD for past weeks is trading 100 and 150 pip days. EUR/NZD should trade easily double 100 and 150.

Trade Rankings

EUR/USD, EUR/JPY, USD/JPY, AUD/JPY, CAD/JPY, NZD/JPY, CAD/CHF, EUR/NZD, EUR/CAD, NZD/USD, AUD/USD, AUD/CHF, NZD/CHF, USD/CAD, EUR/AUD.
EUR/USD targets 1.0140 while short to USD/JPY and JPY cross pairs. Oversold NZD/CHF will lead NZD/USD higher. EUR/AUD higher matches oversold GBP/AUD. Watch EUR/AUD 1.4748 for trade much higher.

EM

DXY at 40 and 50 year averages most affected USD/EM to trade to overbought tops. Best shorts are located in USD/BGN, USD/DKK, USD/HUF, USD/TRY,

USD/BRL and USD/ZAR are working off overbought and heading to neutrality. Brazil and South Africa are members to the restoration of the BRIC alliance as Brazil, Russia, India and China.

Brian Twomey

FX Next Week

DXY traded to 110.78 highs against tops to the 40 and 50 year averages at 110.72 to 111.55. Points 110.72 – 111.55 holds as tops for months to come. DXY tops are driving non USD anchor pairs higher such as AUD/USD, NZD/USD, EUR/USD and GBP/USD. DXY tops drove USD/CAD 100 pips lower to current 1.3000’s from 1.3200 highs. USD/JPY from reported 144.82 tops now trades 142.00’s.

DXY at current 108.00 crossed below 109.00’s CAD/JPY. On the way higher for DXY to 110.78, EUR/AUD broke above vital 1.4740 to trade 1.4881 highs.

Next FX focus is wide range currencies EUR/AUD, EUR/NZD, GBP/AUD and GBP/NZD.
AUD/USD currently trades 0.6868 Vs AUD/EUR at 0.6749 and EUR/AUD at 1.4815. Last evening at 4:00 pm EST, AUD/USD traded 0.6750 Vs AUD/EUR at 0.6754 and EUR/AUD 1.4807.

As DXY dropped to assist AUD/USD higher, AUD/USD was provided further assistance to cross above AUD/EUR to trade 126 pips higher to 0.6876.

NZD/USD at current 0.6138 competes with NZD/EUR at 0.6081 Vs EUR/NZD at 1.6444 as NZD/USD crossed above NZD/EUR.

EUR/CAD at 1.3124 Vs CAD/EUR 0.7619 to CAD/CHF 0.7379 and CAD/USD 0.7695. Yesterday at 4:00 pm, EUR/CAD 0.7642 Vs USD/CAD 0.7640 and CAD/CHF 0.7414. Actual at 4 yesterday, USD/CAD 1.3090 Vs EUR/CAD 1.3085.

CAD/GBP at 0.6623 trades above NZD/GBP at 0.5286 and AUD/GBP at 0.5909.

Next Week

DXY at 108.00’s Vs EUR/USD at 1.0000’s and parity offers roughly an 800 pip spread and down from 1100 at week’s beginning. Despite DXY at extreme 50 year highs and judged by wide range currency reciprocals, moves won’t see violent up and down swings but rather fairly normal movements.

EUR/USD is expected a close in the vicinity of 1.0052 to range next week from 0.9944 to 1.0085. EUR/USD big break for higher prices is now 1.0225. Targets next week then become 1.0154.

USD/JPY target and big break is located at 141.11. USD/JPY must break 135.00’s for a deeper move lower.

JPY cross pairs trade severely overbought but must break for GBP/JPY is found at 162.47 and EUR/JPY at 138.59 while CAD/JPY is held higher by 104.00’s, AUD/JPY at 93.00’s and NZD/JPY 84.00’s.

Next week to short JPY cross pairs targets EUR/JPY 140’ss and GBP/JPY easily 163.00’s.
USD/CAD most vital is located at 1.2958 and targets 1.2834. USD/CAD broke below the 5 year average at 1.2980. DXY lower then targets USD/CAD at 400 pips from the 5 year average at 1.2563. Lower USD/CAD and DXY challenges EUR/CAD big break at 1.3245.

GBP/USD trades 1.1574 to 1.1783 in wide ranges.

Severely overbought EUR/NZD for lower must clear 1.6338 and not much to changes since last week. Overbought EUR/NZD continues its wide divergence to oversold GBP/NZD.

GBP/CHF at 1.1200’s trades a lifetime low never seen before in 69 years of trade since 1953. GBP/CHF at the 2008 crash traded 1.9948 and dropped 8700 pips or 600 pips per year.

Brian Twomey

DXY Vs the Political and Economic system and Exports

The current historic market story for the generations is the political battle for western governments to continue capitalism or switch to an authoritarian system. The United States leads the way with Democrats, Black Rock, Vanguard and state street and control of 20 trillion Vs the Republicans and Trump to convert the system back to its capitalistic roots. The Democrats are currently victors particularly as they secured support from major companies.

Democrats seek support, direction and control of every dollar while Trump and Republicans pursue capitalism to spread the wealth.

Central banks up next to fight the battle of high Inflation and raise interest rates but not cause economic calamity nor involve themselves nor take sides in the political hostility. One mistake by Powell then the Fed and the independence of central banks will be lost to control of the political system. And never to return.

The Fed’s raise interest rate policy forced DXY long past 50 year averages and non USD pairs to lowest levels not seen in decades.

The next battle if one existed is control of export markets as once existed in the 1930’s under free float currencies. Subordinate to the scenario of high inflation, low GDP and lowest exchange rates in decades, nation economies are prime to regain lost revenue from high inflation and low GDP. Now we have a true economic conflict between nations regardless of the capitalism vs Authoritarian victors.

DXY achieved 110.70 highs and 85 pips from vital 111.55. Count EUR/USD at minus 85 pips and historic bottom is located at 0.9811.

GBP/JPY at 165.00’s approaches 168.00’s highs from the break at the 5 year average at 146. Since February, GBP/JPY traded 146.00 at the 5 year average to 168.00 highs.
EUR/AUD watch vital 1.4740. GBP/AUD is the better trade long. USD/JPY and JPY cross pairs trade in the stratosphere. Add 85 pips to today’s USD/JPY then highs are located at 144.82.

EUR/NZD trades lower by break at 1.6332 while GBP/NZD trades higher by break at 1.9163. Wide divergence exists between GBP/NZD and EUR/NZD.

Best trades to finish the week and heading into next are long EUR/USD and EUR cross pairs and short USD/JPY and JPY cross pairs.

Brian Twomey

EUR/USD V DXY: 40 and 50 Year Averages, Pt 2

DXY monthly averages from 1 year to 50 line up as follows:
1 Year 99.67
5Y = 95.69
10Y =92.83,
15Y =88.16
20Y = 88.41
25= 92.02
30Y = 91.64
35Y = 91.62
40Y = 95.75
45Y = 95.81
50Y = 96.43

Averages from 1 year to 39 trade stratospheric overbought while averages from 40 to 50 drive current DXY. The top from 110.72 to 111.55 normalizes the DXY price from 40 and 50 year averages. Above 110.72 and 111.55 begins overbought from 40 and 50 year averages.

Overbought means count another 100 pips and every 100 pips from 111.55. Above 111.55 for example then trades 112.18, 112.20, 112.24, 112.29 and 112.36. Then next comes 113.00’s and 114.00’s.

Can DXY reach such lofty levels on overbought 40 and 50 year averages and send lower averages to more massive overbought. DXY began this upward journey upon the 2008 crash at around 75.00 or 3400 pips in 14 years and roughly 250 pips per year.

Quite an extraordinary circumstance but not unusual to trade 40 and 50 year averages. Roughly 10 years ago CHF/JPY traded 150.00 and 160.00’s and overbought at 50 year averages. Years later, CHF/JPY traded to 100.00’s.

DXY is on the same path as CHF/JPY to trade years and years of lower prices. The immediate trade is short USD/JPY, long EUR/USD and short JPY cross pairs. USD/JPY is most representative of DXY as the same exact pair while USD/CAD and USD/CHF trade in their own universe. The only currency to analyze against DXY is USD/JPY.

Historically from 50 years and BOE creation in 1694, markets trade in the 2nd of 4 quadrants marked by 12 1/2 year periods. The current 2nd period runs from 2018.5 to 2031 which is a crash phase historically as every market crash or new market trade arrangement developed in the 2nd quadrant since 1694. Previous Gold and Silver standards, depression and recessions and new interest rate arrangements highlight 2nd periods.

The crash of 2008 is viewed as not crash but the craziest news announcement on record as EUR/USD reached its maximum peak and USD/JPY bottomed.

DXY at 40 and 50 year averages is extraordinary but not unusual to markets especially in 2nd periods.

Brian Twomey

FX Weekly: EUR/USD V DXY 40 and 50 Year Averages

When DXY broke its 5 year average at 95.00’s in February 2022, the target and top was located at 99.00’s and 100.00. A Trade from a 5 year average only contains ability to travel 400 to 600 pips depending on the currency pair.

EUR/USD for example broke its 5 year average in November 2021 to target 108.00’s and a 600 pip trade vs 400 to 500 for DXY. AUD/USD broke its 5 year average at 0.7200’s in April 2022 and traded 600 pips to 0.6600’s. NZD/USD also broke below its 5 year average in April 2022 at 0.6600’s and traded 600 pip lows to 0.6000’s. USD/CHF broke above 0.9500’s in April 2021 and traded 500 pips while GBP/USD broke below 1.3000’s and traded 1500 pips.

DXY decided to travel 900 pips higher from the 100.00 target and EUR/USD traded 900 pips lower from 108 to 0.9900 lows. What allowed an extra 900 pips higher to DXY from 100 was the 40 to 50 year monthly averages at 96.00’s to cross above the 5 year. This February 2022 event was powerful and added a 1400 pip distance to allow DXY to travel to 109.00’s.

While DXY and EUR/USD contained Doji monthly candles February 2022, EUR/USD as leader currency broke its 5 year average at 1.1400’s in November 2021 and continued to 0.9900 lows. DXY was and remains the currency market story today as the break above 40 and 50 year monthly averages at 96.00’s determined how far all currency pairs would travel on the next journey.

DXY’s clean break at 96.00’s for example informed the EUR/USD 1.0800 target was just the beginning to the downtrend while USD/JPY went ballistic in March 2022 and traded 1100 pips from 114.00 to 125.00’s then another 1000 pips from 121.00 to 131.00’s in April 2022. USD/JPY today trades 140.00’s.

DXY break at 96.00’s offered the ability for GBP/USD, AUD/USD, NZD/USD to travel lower and break 5 year averages while USD/CHF broke and traveled higher. April was the deciding factor for many currency pairs and a full 2 months from the DXY break in February.

If DXY held at 96.00’s the currency market story today would be quite different. How rare is such an event is highlighted by 600 data points of monthly averages dated to 1972 as DXY triple digits closed 173 monthly averages or 28% within the life of DXY.

The break further informs EUR/USD monthly averages from 40 to 50 years must be close at 1.1400’s as DXY and EUR/USD trade the exact same 1400 pips from 5 year averages. For every action requires an equal and opposite reaction from 2 opposite currency pairs.

DXY informs not only deeply overbought but the top is located from 109.00’s to exactly 111.55. To move higher requires slow long dated averages to move higher. Not only averages inform to massive overbought but DXY varied an extraordinary almost 7%. Inside DXY’s price is far to much variation and required is noise to massively rise to normal levels.

DXY first break to averages is located at 99.67 and a full 1000 pips from current 109.00 price. DXY still trades within 200 pip ranges from 109.00 to 107.00’s, and 107.00’s to 105.00’s. For the week watch 109.15 then 107.31.

The strategy moving forward is a continuation to long EUR/USD, GBP/USD, AUD/USD, NZD/USD and short USD/JPY and JPY cross pairs to include CHF/JPY. A lower DXY warrants a rise in stock markets, WTI and OIL and all risk assets.

Brian Twomey

DXY 50 Year Monthly Averages

108.85,106.00,104.68,101.75,102.96,98.31,96.71,96.54,95.97,95.99,94.12,94.23,92.63,92.17,92.44,90.03,91.28,93.23,90.88,90.58,89.94,91.87,94.04,93.89,92.14,93.35,97.39,98.34,99.02,99.05,98.13,97.39,96.39,98.27,97.35,99.38,98.92,98.52,96.13,97.75,97.48,97.28,96.16,95.58,96.17,97.27,97.13,95.13,95.14,94.49,94.64,93.98,91.84,89.97,90.61,89.13,92.12,93.05,94.55,93.08,92.67,92.86,95.63,96.92,99.05,100.35,101.12,99.51,102.21,101.50,98.44,95.46,96.02,95.53,96.14,95.89,93.08,94.59,98.21,99.61,98.63,100.17,96.95,96.35,95.82,97.34,95.48,96.91,94.60,98.36,95.32,94.80,90.27,88.36,86.92,85.94,82.75,81.46,79.78,80.37,79.47,80.10,79.69,81.31,80.04,80.68,80.19,80.22,82.09,81.45,83.14,83.26,81.75,83.22,81.95,79.21,79.77,80.15,79.92,79.93,81.21,82.64,81.63,83.04,78.78,79.00,78.74,79.29,80.18,78.38,76.17,78.55,74.12,73.90,74.30,74.64,72.93,75.86,76.89,77.73,79.03,81.19,77.27,78.72,83.20,81.54,86.02,86.59,81.87,81.07,80.36,79.46,77.86,74.78,76.30,76.65,78.17,78.35,80.16,79.23,84.82,85.51,88.17,85.83,81.15,86.52,85.63,79.45,77.38,73.23,72.46,72.88,72.51,71.80,73.71,75.18,76.69,76.15,76.48,77.72,80.79,80.77,81.92,82.30,81.45,82.93,83.57,84.61,83.72,82.92,85.32,85.97,85.05,85.30,85.22,84.72,86.11,89.73,90.11,88.96,91.17,91.57,90.07,89.52,87.58,89.35,89.11,87.76,84.43,84.06,82.51,83.60,80.85,81.82,84.91,87.36,88.94,89.96,88.80,88.95,90.48,87.61,87.31,87.20,86.92,90.21,92.73,92.85,98.10,96.89,94.73,93.27,97.19,99.06,99.71,99.91,101.85,106.41,106.64,106.87,106.98,107.41,106.11,111.81,115.19,118.62,119.16,120.24,116.75,116.13,114.86,113.48,113.42,117.18,119.43,119.07,115.85,117.37,112.01,110.52,109.56,115.24,116.65,113.25,112.60,109.57,106.84,108.74,110.14,105.44,105.92,105.13,101.87,101.99,99.06,98.54,99.95,99.75,102.85,102.51,101.00,100.10,98.68,96.08,94.17,96.20,93.73,96.17,100.20,101.20,101.17,100.45,99.71,101.50,99.82,100.79,99.65,97.79,95.64,97.11,99.00,99.64,95.67,94.85,97.18,94.72,94.89,93.04,88.18,87.92,87.43,87.94,86.36,85.90,87.82,87.78,88.02,86.52,86.29,87.38,84.76,85.26,83.66,84.29,85.57,81.57,81.58,82.57,81.80,81.90,85.93,87.99,88.73,89.13,85.69,87.88,89.67,89.87,89.62,92.52,92.12,93.06,94.55,95.59,96.84,96.21,95.08,92.82,93.95,95.37,93.63,89.08,89.49,91.87,94.05,92.46,92.36,90.84,87.63,81.10,78.88,81.91,83.72,87.22,89.62,89.65,88.99,87.49,83.52,88.19,89.93,89.90,93.49,93.48,96.06,93.13,91.54,92.02,84.08,82.00,83.07,82.93,83.28,86.00,86.56,87.17,91.15,92.98,93.07,93.69,93.29,92.41,93.21,96.27,98.07,98.47,102.28,97.39,102.02,102.98,97.71,98.14,94.90,96.77,92.50,90.53,93.76,97.69,98.42,97.53,95.41,91.09,89.16,88.30,90.53,90.34,85.42,89.15,93.65,98.57,97.32,99.79,98.13,97.77,95.94,97.11,99.26,99.86,103.58,105.92,109.27,106.74,106.43,108.04,111.61,117.51,111.77,117.92,115.08,121.52,123.46,124.99,129.39,132.12,138.20,137.26,146.12,147.86,149.70,149.18,160.41,152.72,151.47,149.21,146.39,147.55,140.33,141.29,136.26,133.69,132.64,128.22,128.25,135.51,131.79,130.64,128.40,128.35,130.84,128.44,124.94,123.79,122.39,122.21,120.35,121.12,117.36,121.00,124.78,122.20,120.29,119.05,119.04,112.79,111.60,114.73,111.93,108.03,104.69,103.18,106.13,107.73,110.28,111.72,107.71,104.95,100.45,96.76,97.06,95.24,90.39,90.01,88.38,86.02,85.85,86.08,85.20,85.93,81.11,93.58,87.65,86.14,85.82,86.79,88.95,85.45,87.19,87.31,87.85,90.53,89.98,88.53,88.18,88.86,86.50,90.22,83.07,88.83,90.00,90.94,93.53,95.46,95.62,93.84,94.60,96.64,96.44,100.37,109.96,103.21,103.64,102.86,103.84,104.52,104.39,105.03,105.26,105.54,104.56,106.19,105.94,105.50,106.13,106.56,106.64,107.29,106.23,105.34,103.66,103.88,103.51,103.53,101.61,104.24,101.79,101.25,95.86,94.63,95.39,94.82,93.00,95.61,97.29,99.57,101.26,102.48,103.18,100.54,100.16,99.77,98.49,99.51,103.03,105.90,102.39,100.35,95.06,94.79,95.77,92.91,93.88,98.00,101.43,101.17,100.13,109.01,110.14,109.85,109.90,109.39

Brian Twomey

DXY Monthly Averages

108.85,106.00,104.68,101.75,102.96,98.31,96.71,96.54,95.97,95.99,94.12,94.23,92.63,92.17,92.44,90.03,91.28,93.23,90.88,90.58,89.94,91.87,94.04,93.89,92.14,93.35,97.39,98.34,99.02,99.05,98.13,97.39,96.39,98.27,97.35,99.38,98.92,98.52,96.13,97.75,97.48,97.28,96.16,95.58,96.17,97.27,97.13,95.13,95.14,94.49,94.64,93.98,91.84,89.97,90.61,89.13,92.12,93.05,94.55,93.08,92.67,92.86,95.63,96.92,99.05,100.35,101.12,99.51,102.21,101.50,98.44,95.46,96.02,95.53,96.14,95.89,93.08,94.59,98.21,99.61,98.63,100.17,96.95,96.35,95.82,97.34,95.48,96.91,94.60,98.36,95.32,94.80,90.27,88.36,86.92,85.94,82.75,81.46,79.78,80.37,79.47,80.10,79.69,81.31,80.04,80.68,80.19,80.22,82.09,81.45,83.14,83.26,81.75,83.22,81.95,79.21,79.77,80.15,79.92,79.93,81.21,82.64,81.63,83.04,78.78,79.00,78.74,79.29,80.18,78.38,76.17,78.55,74.12,73.90,74.30,74.64,72.93,75.86,76.89,77.73,79.03,81.19,77.27,78.72,83.20,81.54,86.02,86.59,81.87,81.07,80.36,79.46,77.86,74.78,76.30,76.65,78.17,78.35,80.16,79.23,84.82,85.51,88.17,85.83,81.15,86.52,85.63,79.45,77.38,73.23,72.46,72.88,72.51,71.80,73.71,75.18,76.69,76.15,76.48,77.72,80.79,80.77,81.92,82.30,81.45,82.93,83.57,84.61,83.72,82.92,85.32,85.97,85.05,85.30,85.22,84.72,86.11,89.73,90.11,88.96,91.17,91.57,90.07,89.52,87.58,89.35,89.11,87.76,84.43,84.06,82.51,83.60,80.85,81.82,84.91,87.36,88.94,89.96,88.80,88.95,90.48,87.61,87.31,87.20,86.92,90.21,92.73,92.85,98.10,96.89,94.73,93.27,97.19,99.06,99.71,99.91,101.85,106.41,106.64,106.87,106.98,107.41,106.11,111.81,115.19,118.62,119.16,120.24,116.75,116.13,114.86,113.48,113.42,117.18,119.43,119.07,115.85,117.37,112.01,110.52,109.56,115.24,116.65,113.25,112.60,109.57,106.84,108.74,110.14,105.44,105.92,105.13,101.87,101.99,99.06,98.54,99.95,99.75,102.85,102.51,101.00,100.10,98.68,96.08,94.17,96.20,93.73,96.17,100.20,101.20,101.17,100.45,99.71,101.50,99.82,100.79,99.65,97.79,95.64,97.11,99.00,99.64,95.67,94.85,97.18,94.72,94.89,93.04,88.18,87.92,87.43,87.94,86.36,85.90,87.82,87.78,88.02,86.52,86.29,87.38,84.76,85.26,83.66,84.29,85.57,81.57,81.58,82.57,81.80,81.90,85.93,87.99,88.73,89.13,85.69,87.88,89.67,89.87,89.62,92.52,92.12,93.06,94.55,95.59,96.84,96.21,95.08,92.82,93.95,95.37,93.63,89.08,89.49,91.87,94.05,92.46,92.36,90.84,87.63,81.10,78.88,81.91,83.72,87.22,89.62,89.65,88.99,87.49,83.52,88.19,89.93,89.90,93.49,93.48,96.06,93.13,91.54,92.02,84.08,82.00,83.07,82.93,83.28,86.00,86.56,87.17,91.15,92.98,93.07,93.69,93.29,92.41,93.21,96.27,98.07,98.47,102.28,97.39,102.02,102.98,97.71,98.14,94.90,96.77,92.50,90.53,93.76,97.69,98.42,97.53,95.41,91.09,89.16,88.30,90.53,90.34,85.42,89.15,93.65,98.57,97.32,99.79,98.13,97.77,95.94,97.11,99.26,99.86,103.58,105.92,109.27,106.74,106.43,108.04,111.61,117.51,111.77,117.92,115.08,121.52,123.46,124.99,129.39,132.12,138.20,137.26,146.12,147.86,149.70,149.18,160.41,152.72,151.47,149.21,146.39,147.55,140.33,141.29,136.26,133.69,132.64,128.22,128.25,135.51,131.79,130.64,128.40,128.35,130.84,128.44,124.94,123.79,122.39,122.21,120.35,121.12,117.36,121.00,124.78,122.20,120.29,119.05,119.04,112.79,111.60,114.73,111.93,108.03,104.69,103.18,106.13,107.73,110.28,111.72,107.71,104.95,100.45,96.76,97.06,95.24,90.39,90.01,88.38,86.02

42 year monthly averages

Brian Twomey

FX Next Week

Most dangerous currency market situation occurs when a currency price trades oversold to more oversold and overbought to more overbought. Doesn’t happen often but when it hits, a market price fails to correct as the price continues its fall or its rise. And the rise and fall is deep to encompass 100’s if not 1000 pips.

GBP/USD in 2019 was the first time to identify such a treacherous phenomenon when GBP/USD dropped every week for 6 solid weeks from 1.2900’s to 1.1900’s. No warning exists to such a situation. The revelation must come quickly or losses are suffered. Explains why GBP currencies are separated from overall trade rankings. The idea is if it transpired once then it may develop again.

GBP/USD in 2019 however was an isolated incident as non USD currencies failed to follow trade to more oversold. Today is different as all currency prices are on board to trade more oversold or more overbought. Once a leader currency trades to different degrees of oversold and overbought then the plebeians of the Roman army naturally follow.

GBP/USD for example since last Thursday dropped 400 pips from oversold 1.1900’s to current 1.1500’s in 5 straight days of red candles. GBP/USD’s drop from 1.2300’s to 1.1500’s occurred in 5 weeks against 4 red weekly candles.

AUD/USD as the next partner currency to GBP, dropped 164 pips straight down the oversold route. AUD/USD has no business to trade below 0.6857 yet dropped another 66 pips.

The examples reign supreme in every currency and every market price but the import is markets trade in a precarious yet unhealthy and unstable period. For how long is unknown as we are dealing with a new concept.

The commonality from 2019 and today is about 200 pips per week to drops. Since 2016 and the new market trade environment, a currency price cannot handle a 200 pip per week drop. A correction must be seen.

Healthy markets for many past years followed the Measured Move, a 4 candle formation to encompass 3 up candles to 1 down or 3 down to 1 up candle. EUR/USD as a leader and highly neutral currency is most specific to the Measured Move. As EUR/USD trades oversold to oversold, the Measured Move so pertinent to EUR was almost obliterated.

Next Week

After a 300 pip straight up performance this week, EUR/AUD now challenges its big break at 1.4705 and targets 1.4793 easily. Or EUR/AUD trades back to 1.4500’s. GBP/AUD traded 182 pips this week and 1/2 EUR/AUD’s range. Normally GBP/AUD outperforms EUR/AUD easily but GBP/AUD suffers the GBP/USD oversold effects.

EUR/USD achieved Sunday’s 1.0072 yet should trade to easily 1.0133 and higher.

EUR/CAD and USD/CAD trade as the exact same currency pair as both trade exact same prices. EUR/CAD faces its big break at 1.3260 while severely overbought USD/CAD trades safely above 1.2910. EUR/CAD’s proper place is a higher exchange rate above USD/CAD.

USD/JPY and EUR/JPY trade as the exact same pair and exact same price. EUR/JPY proper is price trades above USD/JPY. The problem is both USD/JPY and EUR/JPY currently trade at Richter Scale overbought.

Exact same pair means ranges, support and resistance levels are exact to each other. A big move is required to break the logjam such as EUR/CAD above 1.3260.

AUD/JPY from top ranked 1st position this week traded 143 pips to GBP/JPY 165 and EUR/JPY 300. GBP/JPY trades below vital 161.82. A Continuation lower forces all JPY cross pairs lower.

EUR/JPY from vital 137.27 for lower prices is expected a close Friday in the vicinity of 138.50 then short for next week.
EUR cross pairs remain the best trades for next week. Vital to EUR cross pairs is EUR/NZD, EUR/JPY and EUR/GBP trade deeply overbought while EUR/AUD, EUR/CHF and EUR/CAD approach vital levels to determine the next legs. EUR/CHF break at 0.9864 is required to move higher or a continuation to long drops.

While GBP/USD trades deeply oversold, GBP/NZD also trades massive oversold but lacks uniformity to overbought EUR/NZD. GBP/CAD and GBP/AUD trade dead in comparison to counterparts EUR/CAD and EUR/AUD while oversold to GBP/CHF.

GBP/JPY 161.82 decides its fate and for the most part has been absent for the past 2 weeks except for day trades.
GBP/USD and GBP/CHF are only available trades for GBP.

Massive oversold AUD/USD and NZD/USD long for next week along with EUR/USD.

Currency markets lack uniformity and trade selection is essential until this concept of oversold and overbought trades higher degrees subsides to bring us back to normalcy.

BOJ Intervention

For interested, BOJ intervention data to USD/JPY by month dated to 1971 is located at btwomey.com. Last intervention was 2011 and 2010 due to Fukishima when USD/JPY was 82.00’s. BOJ intervention takes place by the Ministry of Finance Forex Division recommendation to the BOJ Forex division. The Ministry of Finance is the authorizing agent to implement intervention by Article 7, Section 3 of the Foreign Exchange and Foreign Trade Act.

Brian Twomey