A special thank you to a dear friend for Thailand Distribution
Flyer Thailand Trade Show
Author: twbrian
USD/TRY V TRY/USD Day Trade
Same set up and principles as EUR/USD V USD/EUR only different names and different numbers.
USD/TRY
Long Short Line 21.1416
Most Important 21.0490 and 21.1294 Vs 21.1481, 21.1547, 21`.1678, 21.1809, 21.1941, 21.2203, 21.2466
Bottom 21.0358 achieves by 21.0620 and 21.0883
Upper Target 21.2466
Continuation Fail 21.1941
TRY/USD
Long short Line 0.0473
Most Important 0.0470 and 0.0472 Vs 0.0474, 0.0475, 0.0476
Bottom 0.0470 achieves by 0.0471 and 0.0472
Upper Target 0.0476
Continuation Fail 0.0475
USD/TRY Vs TRY/USD
Upper Target 21.2466 Vs 0.0470 or USD/TRY 21.2466
Continuation fail 21.1941 Vs TRY/USD 0.0471
Bottom 21.0358 Vs TRY/USD 0.0475
Brian Twomey
EUR/USD V USD/EUR Day Trade
This is FX 101 and posted on site many times since 2015. Both are mathematically perfect. Previous example were shown in deep detail.
EUR/USD Today 54 pips Vs USD/EUR 47. Establishes daily ranges and a fairly constant relationship these days. EUR/USD Vs USD/EUR = Perfect negative Correlation at minus 100%.
This means EUR/USD higher = USD/EUR lower and EUR/USD lower = USD/EUR higher. Both EUR/USD and USD/EUR are married to ranges as set by daily interest rates. Extremely rare day for EUR/USD and USD/EUR to trade outside daily ranges.
By this setup and known at the start of 2:30 AM EST day trades, trades are taken for multiple longs and shorts for continuous profits. And every Trade day.
EUR/USD
Long Short Line 1.0692
Most Important 1.0644 and 1.0685 Vs 1.0698, 1.0705, 1.0712, 1.0719, 1.0732, 1.0739, 1.0746
Bottom 1.0638 achieves by 1.0651 and 1.0665
Upper Target 1.0746
Continuation Fail 1.0719
USD/EUR
Long Short Line 0.9352
Most Important 0.9310 and 0.9346 Vs 0.9357, 0.9363, 0.9369, 0.9375, 0.9387, 0.9393, 0.9399
Bottom 0.9305 achieves by 0.9316 and 0.9328
Upper Target 0.9399
Continuation Fail 0.9375
EUR/USD V USD/EUR
Upper Target EUR/USD 1.0746 Vs USD/EUR 0.9399 or EUR/USD 1.0639
Continuation fail 1.0719 Vs USD/EUR 0.9375 or EUR/USD 1.0667
Bottom EUR/USD 1.0638 Vs USD/EUR 0.9305 or EUR/USD 1.0746
Brian Twomey
USD/CZK, USD/TRY, USD/RON, USD/CNY, AUD/EM
USD/CZK shorts below 2.0853 to target 21.9993, 21.913321.8273 and 21.7413.
USD/RON short below 4.6496 to target 4.6279, 4.6171. Short below 4.6062 to target 4.5954.
USD/CNY targets 7.0647 and 7.0329.
USD/TRY 20.9632 open and Richter Scale overbought. Weekly Range 21.0748 to 20.8550. At 20.8550 remains massive overbought. Further targets 20.6013 and 20.3101.
AUD/CNY Deeply overbought from 4.6812, Targets 4.6796, 4.6711, 4.6627, 4.6541
AUD/KRW oversold 862.78. Targets 863.18,69, 867.1644, 871.1420 and 873.1307
AUD/MYR Massive overbought at 3.0229. Targets 3.0205, 3.0158, 3.0110, 3.0063 and 3.0039
Brian Twomey
FX Weekly: USD/CLP V Copper, Interest rates and Currency Pairs
Australia’s ASX 30 day Cash Rate Target Tracker informs a 37% chance for the RBA to raise to 4.10 as of last Friday and up from 22% on June 1 and May 31. Vital Bank Bill Swap rates dropped substantially since May 31 while OCR traded 3.85 to 3.82 since the last RBA raise to 3.85 on May 2. No indications exists for the RBA to raise.
The 30 day Cash Rate tracker informs a raise to 4.16 best shot occurs from August to December 2023 then begins a long and slow slide lower to 3.52 by November 2024.
Canada’s 3 month CDOR rate and traded as BAX informs a 28% chance for the BOC to raise by 25 points.
Implied rates reveal September at 88% and December at 84% as the best probability to a BOC raise by 25 points then begins lower rates until March 2026 however against low probabilities. December 2024 and March 2025 both offer a 64% probability of 100 and 125 basis point decrease and 96% probability September 2025 by a 175 basis point drop.
Central banks align as either one last raise or in preparation to drift lower and extraordinarily slow. In 2024 and 2025, writings will reveal the probabilities of a possible 25 point drop.
The key word is extraordinarily slow as central banks fully adopted phase 2 from the 2016 interest rate reshuffle by first eliminating interest rate maturities from 7 to 5 rates. The SOFR Vs Fed Funds rate serves as an example to all central bank’s latest methodologies.
Fed Funds ability to trade 25 and 30 points per day is matched by SOFR to trade 18 and 20 point days. SOFR ranges provides control to Fed Funds to ensure Fed Funds trades within its boundaries yet limits Fed Funds ability to trade full daily ranges.
All central banks not only adopted a typical SOFR rate but also created compound indexes to trade alongside the newly produced SOFR rate.
Fed Funds ability to trade full daily ranges became a rare day as central banks slashed interest rate ranges and all central banks followed.
Central banks pre 2016 were distinguished by either an interest floor or ceiling system. All central banks today are now floor and ceiling systems. Note the similarities to raise probabilities as all central bank interest rates reveal the same probabilities. Interest rate numbers from central bank to central bank are different but all interest rates trade and perform the exact same operations.
Seen in markets are rare days to trade 100+ pip days, 50 pips to interest rate changes and NFP surprises go unnoticed. EUR/USD for example traded 400 pip ranges in each of the past 7 months and broken down to 50 pip days.
The Week
AUD/USD begins the week deeply oversold and targets the break at 0.6638 to trade the target at 0.6700’s. EUR/AUD’s target at 1.6083 traded to lows last week at 1.6187 from 1.6500’s. New targets are located at 1.6119, 1.6004 and 1.5900’s. EUR/AUD opens at 1.6201 and just above the big line break at 1.6198. Higher for EUR/AUD must break a vital line at every 100 pips to 1.6500’s. EUR/AUD remains the preferred trade to GBP/AUD.
GBP/AUD is held below by 2 lines at 1.8580 and 1.8581. While EUR/AUD vital breaks are located at every 100 pips, GBP/AUD trades 200 pip ranges. The top lines for GBP/AUD are located at 1.9000’s and 1.9100’s.
EUR/USD must break 1.0743 to trade higher then EUR/USD runs into trouble at 1.0779.
GBP/JPY trades 170.37 to 172.24 – 174.83 at the 31, 32 and 33 year monthly averages. GBP/JPY traded 174.67 and dangerously close to 174.83. GBP/JPY big line for the week is found aright around 174.64 and a 172.00 target to start. GBP/JPY begins the week overbought.
USD/JPY target at 138.16 traded to 138.45 lows from upper 140.00’s. USD/JPY supports are located every 100 pips from 140.00’s. We again target low 138.00’s for the week.
CAD/JPY achieved Richter Scale overbought status and targets 102.00’s and 101.00’s easily. USD/CAD trades deeply oversold and matches to overbought CAD/JPY. No hurry to trade USD/CAD as CAD/JPY is preferred. CAD/CHF trades fairly neutral and neutrality should allow USD/CAD to relieve oversold while CAD/JPY trades lower.
GBP/USD 1.2288, 1.2328, 1.2587. No changes to the same old GBP story. The target is the eventual break at 1.2687 then 1.2700’s again.
GBP/NZD overbought 2.0700’s traded to 2.0500 lows and next comes 2.0300’s, 2.0200 and 2.0100’s. GBP/NZD begins the week overbought at 2.0500’s.
EUR/CAD and GBP/CAD both begin the week oversold
USD/CLP Vs Copper
USD/CLP 816.45 = Copper 3.6056
USD/CLP 817.40 = 3.5973
USD/CLP 819.31 = Copper 3.5806
USD/CLP 793.60 = Copper 3.8057
USD/CLP 792.65 = Copper 3.8140
USD/CLP 790.75 = Copper 3.8307
Brian Twomey
USD/CAD and BOC Interest Probabilities
| Movement (in bps) | June 2023 | Sept. 2023 | Dec. 2023 | March 2024 | June 2024 | Sept. 2024 | Dec. 2024 | March 2025 | June 2025 | Sept. 2025 | Dec. 2025 | March 2026 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| $94.830 | $94.680 | $94.690 | $94.880 | $95.160 | $95.490 | $95.810 | $96.060 | $96.240 | $96.390 | $96.520 | $96.520 | |
| +100 | ||||||||||||
| +75 | ||||||||||||
| +50 | ||||||||||||
| +25 | 28% | 88% | 84% | 8% | ||||||||
| 0 | ||||||||||||
| -25 | ||||||||||||
| -50 | 4% | |||||||||||
| -75 | 36% | |||||||||||
| -100 | 64% | |||||||||||
| -125 | 64% | |||||||||||
| -150 | 36% | 96% | ||||||||||
| -175 | 48% | 48% | ||||||||||
Brian Twomey
AUD/USD, Interest Rates and RBA
| Trading Day | No Change | Increase to 4.10% |
| 24 May | 100% | 0% |
| 25 May | 97% | 3% |
| 26 May | 100% | 0% |
| 29 May | 97% | 3% |
| 30 May | 90% | 10% |
| 31 May | 78% | 22% |
| 1 June | 78% | 22% |
| 2 June | 63% | 37% |
BBSW 10 day history
| DATE | 1 MONTH | 2 MONTH | 3 MONTH | 4 MONTH | 5 MONTH | 6 MONTH |
|---|---|---|---|---|---|---|
| 31 MAY | 3.8550 | 3.9250 | 4.0145 | 4.0800 | 4.1650 | 4.2150 |
| 30 MAY | 3.8372 | 3.9064 | 3.9818 | 4.0400 | 4.1200 | 4.1700 |
| 29 MAY | 3.8253 | 3.8900 | 3.9580 | 4.0250 | 4.1000 | 4.1550 |
| 28 MAY | 3.8314 | 3.8799 | 3.9537 | 4.0300 | 4.1014 | 4.1673 |
| 25 MAY | 3.8264 | 3.8728 | 3.9476 | 4.0200 | 4.0900 | 4.1450 |
| 24 MAY | 3.8189 | 3.8700 | 3.9297 | 3.9950 | 4.0650 | 4.1328 |
| 23 MAY | 3.8287 | 3.8700 | 3.9230 | 3.9941 | 4.0650 | 4.1293 |
| 22 MAY | 3.8163 | 3.8457 | 3.9155 | 3.9800 | 4.0550 | 4.1100 |
| 21 MAY | 3.8125 | 3.8600 | 3.9167 | 3.9978 | 4.0600 | 4.1093 |
| 18 MAY | 3.8291 | 3.8587 | 3.9294 | 4.0135 | 4.0667 | 4.1175 |
Australia’s ASX 30 day Cash Rate Target Tracker informs a 37% chance for the RBA to raise to 4.10 as of last Friday and up from 22% on June 1 and May 31. Vital Bank Bill Swap rates dropped substantially since May 31 while OCR traded 3.85 to 3.82 since the last RBA raise to 3.85 on May 2. No indications exists for the RBA to raise.
The 30 day Cash Rate tracker informs a raise to 4.16 best shot occurs from August to December 2023 then begins a long and slow slide lower to 3.52 by November 2024.
Brian Twomey
USD/CLP Vs Copper
I see posts to Copper alone but they forgot the main ingredient as USD/CLP which runs negative Correlations to Copper and a double trade but also a reinforcement indicator to the Copper trade. Posted on site here is many USD/CLP Vs Copper Trades.
USD/CLP 841.52 V Copper 3.3053
862.81 Vs Copper 3.0924
905.40 Vs 2.66 5
USD/CLP 805.03 Targets 816.45, 817.40, 819.31
Below target 793.60, 792.65, 790.75
Copper 3.7057 Targets 3.8057, 3.8140, 3.8307
Below targets 3.6056, 3.5973, 3.5806
USD/CLP 816.45 = Copper 3.6056
USD/CLP 817.40 = 3.5973
USD/CLP 819.31 = Copper 3.5806
USD/CLP 793.60 = Copper 3.8057
USD/CLP 792.65 = Copper 3.8140
USD/CLP 790.75 = Copper 3.8307
Brian Twomey
EUR/USD V DXY, EUR/USD V USD/EUR
EUR/USD 1.0734 V DXY 103.74
1.0749 V 103.59
1.0779 V 103.29
1.0854 Vs 102.54
1.0929 Vs 101.79
1.1004 Vs 101.04
EUR/USD, DXY and markets remain in 300 ish pip ranges. Range expansion and wider trade ranges occur on breaks at 1.0779 and 103.29. The breaks won’t happen this week.
While DXY serves its purpose, the better and longer term view is seen from the EUR/USD V USD/EUR relationship particularly as EUR/USD Vs USD/EUR remain correlated at a perfect 100% as is EUR/USD and DXY.
EUR/USD 1.0840 Vs USD/EUR 0.9204
1.0909 Vs 0.9135
1.1045 Vs 0.8999
1.1386 Vs 0.8658
1.1727 Vs 0.8317
1.2068 Vs 0.7976
EUR/USD longer term view now becomes 1.0500’s to 1.1300’s or 800 pips and vital breaks at 1.1100, 1.1300’s and 1.1600’s. EUR/USD at 1.0700’s trades at the lower end to 1.0500’s and 1.1300’s. Note the longer term target at 1.1044 Vs 1.1045.
For day trades, EUR/USD is traded Vs USD/EUR and impossible not to trade as EUR/USD Vs USD/EUR. Currently, EUR/USD trades 54 pips from USD/EUR at 47 pips or on rare days, 108 Vs 94. Normally to rare days, EUR/USD 81 Max Vs 70 USD/EUR.
Compared EUR/USD at 54 Vs DXY running at current 53. This relationship runs fairly even at 54 and 53 and it won’t hold because USD/EUR runs 47 pips to DXY 53. Total 6 pips are missing . Monday after interest rate changes, the trade relationship will change for Tuesday trades and USD/EUR Vs DXY will trade correctly to fix the missing 6. EUR/USD must trade more pips than DXY for day trades and by design.
Brian Twomey
USD/JPY and JPY/USD Day Trades
As I stated many times, subscribers support this blog and purpose for writing, trades and research. Subscriber list is currently light with hope a few come on. Requirement is follow the trade script and I assure all to profits. The pen, paper and calculator is far more powerful than anything ever invented.
If subscribers fall to zero then what. Sell copies to trade systems, remain private and not post trades on FXstreet. God knows I have the best available ever invented because I took years of time to ensure I’m right and without mistakes. But systems require hedge fund money for purchase due to the massive amount of development costs. But I wouldn’t know what a hedge fund was if it hit me in the head. Those I’ve seen on social media don’t deserve any respect.
An interest rate = exchange rate and exchange rate = interest rate. Both put together is found below.
Oh BOJ informed today, USD/JPY higher for Monday.
USD/JPY
Long Short Line 138.90
Most Important 138.37 and 138.80 Vs 138.98, 139.07, 139.16, 139.25, 139.42, 139.51, 139.60
Bottom 138.20 achieves by 138.37 and 138.55
Upper Target 139.60
Continuation Fail 139.25
USD/JPY is perfect.
JPY/USD
Same concept in reverse.
Long Short Line 0.0071994
Most Important 0.00712 and 0.00719 Vs 0.0071952, 0.0071906, 0.0071813, 0.0071725, 0.0071679, 0.0071633
Bottom 0.00710 achieves by 0.00712 and 0.00719
Upper Target 0.0072988
Continuation Fail 0.0072491
Bottom = 140.84.
Upper Target = 137.00
Continuation Fail = 137.94
JPY/USD must factor by 7 numbers after the right side decimal. My system max takes 5 numbers which means JPY/USD is off. The levels for most important was converted from USD/JPY so correct.
JPY/USD works as max = 0.0000994, and 1/2 = 0.0000497. Next week, I will take the time to factor completely. Again, Pen, paper and calculator and that’s all it takes for successful trading.
Brian Twomey
FX Next Week: USD/TRY, 20 Currencies Levels and Targets
The tight relationship between oversold EUR/USD and overbought DXY remains and ensures currency and all markets will continue to hold to confined ranges. DXY at upper 104.00’s not only trades massively overbought but breaks at 102.00’s is required to trade again to 100.00’s. DXY has easy ability to break 102.00’s and trade to 100.’s over the next weeks. For next week, DXY holds at 104.00’s to 103.00’s.
Oversold EUR/USD is governed by 1.0751, 1.0863 and 1.0931. A break at 1.0931 ensures EUR/USD trades to 1.1000 and 1.1100’s. The longer term target at 1.1044 achieves quite easily. EUR/USD trades in a 1.0500 to 1.0800 range as 1.0500’s and 1.0600’s becomes oversold and overbought at 1.0800’s. The EUR/USD and DXY relationship must break wide open in order for trade ranges to expand. Without a break, markets remain settled into 200 pip ranges.
On the EUR/USD and DXY question at 1.0500’s, the vital cross is not seen nor expected. At EUR/USD 1.0500’s becomes oversold to extremes while DXY 105.00’s trades at overbought extremes. The direction for EUR/USD is higher and long strategies while short strategies for DXY and USD currencies.
An expanded and deeply detailed version to yesterday’s USD/JPY and Intervention posts is located at btwomey.com for interested. An entire series to USD/JPY and BOJ interest rates also exist and posted over the past week.
USD/JPY remains correlated to GBP/JPY at +81% and GBP/USD to GBP/JPY at +75%. This relationship has held for the past 4 and 5 weeks. USD/JPY correlates to EUR/JPY at +75% and EUR/USD to EUR/JPY at +49%.
The positive is the EUR/USD and EUR/JPY correlation breakdown is underway as the final result will materialize as USD/JPY fully correlates to JPY cross pairs. This means the USD/JPY and JPY cross pair downtrend will finally occur rather than trade months long ranges.
The market theme to extreme prices holds at it relates to GBP/NZD, EUR/NZD and GBP/AUD and EUR/AUD. As reported Sunday, EUR/AUD held at its big line at 1.6500’s and traded to 1.6300 lows. GBP/AUD broke 1.9000’s to trade 100 pips higher at 1.9100’s.
EUR/AUD for next week again holds at the vital break line at 1.6500’s while GBP/AUD trades massive overbought at 1.9100’s and targets 1.8900’s easily then 1.8700’s.
DXY forced GBP/NZD to trade overbought extremes at 2.0700’s.
GBP/NZD next week targets 2.0300’s and this is just the beginning to a 1000 pip trade to target 1.9700’s.
GBP/NZD is the dominant currency in the GBP/NZD vs EUR/NZD relationship by outperformance to EUR/NZD by at least 45 and 90 pips. GBP/NZD broke vital 2.0600’s and traded to new highs at 2.0700’s while EUR/NZD dead stopped at 1.7800’s Vs the old high at 1.8000. EUR/NZD at extreme highs at 1.7800’s lacks the power to trade 1.8000’s and became the early warning to GBP/NZD’s top at extreme 2.0700’s.
GBP/USD traded to the brink Tuesday at 1.2326. From Sunday, higher for GBP/USD with focus on 1.2489. GBP/USD traded highs at 1.2457 as of this writing. GBP/USD 1.2328 remains the vital break lower and 1.2587 to target higher to 1.2700’s. Vital for next week to target higher GBP/USD is 1.2437, 1.2468 and 1.2512. GBP/USD next week targets easily the break at 1.2468 to target 1.2490 and 1.2512.
Oversold AUD/USD targets next week 0.6627 and 0.6700’s longer term. No other choice for AUD except to long drops to target the big break at 0.6645 then 0.6700’s.
USD/JPY extremes remain at 140.90, 141.39 and 141.88. Highs achieved 140.92. The target as written Sunday at 138.17 achieved lows at 138.95. Lows next week targets 137.97. USD/JPY for the next 24 hours trades lower. Overall USD/JPY follows DXY in 100 and 200 pips ranges. DXY requires a break to see USD/JPY get going again.
NZD/USD trades extremes at 0.6014 and targets next week 0.6141 and 0.6157. CAD/JPY extremes achieve at 103.15 and 103.48 and targets easily 102.49. For USD/CAD, nothing new except overbought and short ranges. USD/JPY is the preferred trade as USD/JPY will outperform USD/CAD by many miles.
USD/TRY began in 2008 at 1.1433 and achieved highs at 21.0304 or 1900 pips in 15 years. USD/TRY trades at extremes at 20.00’s and 21.00’s. The mid point to the uptrend is located at 11.00’s and target at 18.00’s and 16.00’s is quite easy to accomplish.
Brian Twomey
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
BRIAN TWOMEY ON TRADING 