DXY Pt 2

As all see from this thing I call a blog, this is a site begun in 2007 ish. It is a site for learning, research and trading primarily FX for friends and traders as I documented nearly 20 years through my trading journey.

All information and concepts are true and accurate and freely given. All concepts are in use today to accurately trade markets. Many leading FX analysts, hedge funds, money managers, FXStreet and everyday traders still peruse this site daily and often. Leading politicians from Europe are here daily over many years. Fxstreet is here far more often than normal lately. Peter Wadkins, god rest his soul, brought the entire Thomson Reuters crowd here. I credit my long time friend Tommy O..

And don’t forget the FXCM analyst crooks who copy and paste my trades and commentary to this day. The beauty of this blog is to write freely to also warn traders of the many crooks among us. The list is endless starting with the currency analysts and the collusion crowd planning to drain accounts. I;m a very nice guy and honest but despise the crooks.

This isn’t a blog hype post and in the larger scheme, nothing changed in the past 20 years as I still reside in the same tiny apartment in a very bad side of town. Drug overdose, theft, robberies are quite common here.

Overall, I wouldn’t know a dealing desk if my life depended on it or the inside of a currency broker, duties of a currency analyst, prop desks, trade conferences. All becoming fleeting cares of concern.

I see nations and views only. The problem today is the same as 2007 as concepts are truly deficient and explains why entry and exit = profits is the only analytical commentary. This also explains the trader turn to sales people and marketer. Profits are secondary.

I offered a few trade services to assist and to include the losers at FXStreet. None interested. Story of the 3 eggs, 2 bad. Enough trader turnover exists for trade services to remain viable.

The trade service is a trader creation and remains to this day for interested. And my assistance to many is the story never told. The list is endless and long.

The last DXY post received many views so I will add to assist.

USD/JPY is the least understood currency because it trades either as pip for pip to DXY or as a percentage of DXY.. Friday, DXY traded 69 pips to USD/JPY 120 or almost double. JPY cross pairs traded less than USD/JPY to inform USD/JPY not only runs and leads JPY cross pairs but JPY cross pair longs don’t have ability to sustain higher levels. They rise due to the Correlations to USD/JPY.

The same USD/JPY concept to DXY is seen in EUR/NZD, GBP/NZD, EUR/AUD, GBP/AUD, GBP/USD and AUD/USD.

The DXY concept is easily reversible for EUR/USD as EUR/USD is the exact opposite to DXY. EUR.USD traded 69 pips Friday to DXY 69 only in the opposite direction.

EUR/USD and XAU/USD top = DXY bottom. Here, trades are reversed.

DXY top = XAU/USD bottom. DXY bottom = XAU/USD top.

DXY top = XAG/USD Silver Bottom. DXY bottom = XAG/USD Silver top.

DXY Vs Interest rates, Fed Funds, Commercial Paper, 3 month and 2 year yield always Correlate 100% to DXY.

DXY top = SPX bottom. DXY bottom = SPX top. The word SPX applies to all stock markets in relation to DXY.

DXY and 2 year yield top = XAU/USD and EUR/USD bottom.

Brian Twomey

DXY

DXY Top = EUR, GBP, AUD, NZD bottoms.

DXY Bottom = EUR, GBP, AUD, NZD top. 

DXY Top = USD/JPY, JPY cross pairs, USD/CAD , EUR/GBP, CHF/JPY, Tops.

DXY tops and bottoms = tops and bottoms EUR/AUD, GBP/AUD, EUR/NZD, GBP/NZD 

DXY Bottom = Unsure to Top EUR/CAD, GBP/CAD, AUD/CAD, NZD/CAD

Brian Twomey

FX Next Week: EUR, DXY, SPX, WTI

DXY for CPI traded to 102.60 lows and 15 pips from the 102.45 break. DXY then bolted higher to trade to low 104.00’s. USD/JPY hit the DXY lows at 131.00 and traded to 134.00 highs.

DXY was included to overall daily and weekly trades. From 28 currency pairs, USD accounts for at least 15 currencies and under question are middle pairs as EUR/CAD, GBP/CAD, AUD/CAD and NZD/CAD for a total of 19. The definitive answer to verify for inclusion or exclusion is found in Correlations and an easy task to complete.

Overall DXY was contained from 102.00’s to 104.00’s. DXY next week will trade the exact same ranges as this week. DXY to trade lower must break 103.35, 103.22 then 102.46 and 102.37. DXY ranges open to 200 pips on a break of 104.40 to trade 104.00 to 106.00.

The 104 – 106 range is DXY’s best opportunity for market profits as averages align above at every 100 pips from 106.00’s. Overall, DXY 104.40 will hold next week.

Best trade opportunities are found in USD/JPY and GBP/JPY on breaks of 133.77 and 161.16. Massive overbought EUR/JPY will follow GBP/JPY lower as well as AUD/JPY, CAD/JPY and NZD/JPY.
USD/JPY’ target is now 130.89 and 65 pips higher from last week’s 130.24. USD/JPY’s movements are leading JPY cross pairs rather than cross pair leaders to USD/JPY.

GBP/USD broke vital 1.2061 and traded to 1.2269 highs or within this range as written last week: 1.2156 -1.2367. GBP/USD on Wednesday broke below 1.2061 to trade 73 pips to 1.1988.
GBP/USD next week aligns as 1.2057, 1.2166, 1.2269, 1.2372. Slight changes since last week and no change to long only strategies.

EUR/USD 1.0597 and 1.0599 Vs 1.0757, 1.0836 and 1.0915.

USD/CAD to last week’s commentary deserves a correction. USD/CAD over weeks is actually following DXY on a pip for pips basis yet trades `1/2 to USD/JPY. Normal CAD from past years should trade alongside USD/JPY. No changes to USD/CAD trading a pure noise perspective. Overall, USD/CAD is a terrific currency and money maker but CAD has fallen and lacks ability to move.

AUD/USD trades 0.6881 to 0.7009 or 128 pips.

EUR/AUD trades above vital 1.5402 while GBP/AUD trades below its important break point at 1.7524. EUR/AUD and GBP/AUD trade divergent to each other in a severe misalignment. The problem pair is GBP/AUD as GBP/AUD ranges died in comparison to EUR/AUD.

EUR/AUD is clearly the better trade pair while GBP/AUD strategy is continuous from the past 3 weeks to long drops at 1.7300’s. The strategy held everyday this week for 100 pips per trade and many trades over the past 3 weeks. GBP/AUD is caught over the past month between 1.7300’s to 1.7500’s.

EUR/NZD and GBP/NZD trade the same same problem as EUR/AUD and GBP/AUD. EUR/NZD trades massive overbought at 1.7000’s while GBP/NZD trades below vital 1.9170. GBP/NZD as widest range currency pair is the problem as ranges died. EUR/NZD is the better currency to trade.

WTI high side target this week was 81.35 and tops achieved 80.65. SPX high target at 4197 traded to 4159 with 2 trade days remaining.

For Gold, WTI, SPX, VIX and DAX are traded daily and weekly, longs and shorts for continuous profits Sunday to Friday.

Currency markets overall are waiting for DXY to inform if DXY continues a correction higher or continues the downtrend by the break at 102.00’s. The overall trend is much lower and we continue the long EUR and short USD/JPY strategy.

Brian Twomey

FX Weekly: EUR, DXY, SPX, WTI

The result to DXY’s bounce from crucial 99.00 and 100.00 supports is averages below build against the 100 levels. As DXY trades higher then more supports build below. The problem to a higher DXY is averages are already contained at every 100 pips above the current price from the downtrend at 114.00’s. DXY and USD currencies are trapped between averages building below and those averages already in place on the topside.

Trapped for DXY refers to 100 pip ranges and a severe slowdown to currencies and all market prices until DXY breaks from tiny ranges. SPX for example traded `119 points last week and the lowest range for the past 5 weeks.

Despite the 2 week rise for DXY, the short only program remains for USD/JPY and long EUR/USD, GBP/USD, AUD/USD and NZD/USD. Higher DXY offers many more pips to USD/JPY shorts and EUR/USD longs.

From DXY’s close at 103.58, DXY will struggle to move higher than low 104.00’s and supports exist at 103.56, 103.31, 103.25 and 102.45. Below 102.45 begins the DXY and USD downtrend again.

On the opposite side is EUR/USD, AUD/USD and NZD/USD as DXY travels higher, averages are building against a higher EUR, AUD and NZD. AUD and NZD are most affected as AUD and NZD ranges are the exact complement to DXY. AUD/USD for example trades 0.6886 to 0.7007 or a 121 pip range while NZD/USD from vital 0.6301 to 0.6492 trades 191 pip range.

The Week

USD/JPY averages are rising slowly against DXY. Last week’s 129.65 for example is this week’s 130.24 then begins oversold. The overall range remains 124.88 to 133.34 and 133.46.
JPY Cross Pairs.

In JPY cross pairs is seen most specifically the DXY effects of USD/JPY averages rising against EUR/USD averages dropping. JPY cross pairs this week are all oversold and oversold to USD/JPY’s far to high price at 131.00’s. USD/JPY and JPY cross pair trend is lower but JPY cross pairs are caught in the DXY compression to ranges. Most specific to reduced ranges is seen in AUD/JPY, NZD/JPY and CAD/JPY as all trade 1/2 to EUR/JPY and GBP/JPY.

Inside EUR/JPY and GBP/JPY prices are built in ranges and always wider than AUD/JPY, NZD/JPY and CAD/JPY to force JPY cross pair movements and to claim leadership positions.

GBP/JPY trades 156.16, 158.85, 160.84. EUR/JPY 135.50, 138.25, 141.01. Bottom averages are dropping however slowly to inform a short only strategy remains the only way forward.

GBP/JPY targets 158.80 and 140.14 for EUR/JPY. The overall lazer focus is GBP/JPY 156.16.
EUR/USD trades oversold and safely above 1.0608 inside the current price path from 1.0591, 1.0608, 1.0673, 1.0753, 1.0834, 1.0914.

USD/CAD not only fails to follow DXY properly and caught in 200 pip ranges for the past 2 months but CAD ranges are reaching its peak and warrants a breakout. For the week, USD/CAD is oversold and travels higher on a break of 1.3387.

Inside USD/CAD’s price is pure noise as measured by an extraordinarily high Noise Ratio vs a low low variation. USD/CAD must trade to at least 1.3500’s or 1.3000’s to relieve the mounting noise pressure and offer wider variation to present 200 pip ranges. Failure to trade wider ranges continues higher Noise tensions to warrant a massive one shot move.

USD/CAD’s big break for lower on a longer term view remains 1.3131 and no changes over the past 2 months. Target on a break is now 1.2901 from 1.3000’s.

EUR/CAD 1.4039, 1.4201, 1.4315 and 1.4524. The change to EUR/CAD averages over the past month is about 200 pips.

GBP/CAD targets easily 1.6184 on a break of 1.6144. Long is the only strategy.

GBP/USD requires a break at 1.2061 then targets 1.2156, 1.2367 and 1.2578.

EUR/AUD trades 1.5362, 1.5407, 1.5577.

GBP/AUD begins the week deeply oversold and targets high 1.7400’s easily.

WTI high target last week was 81.32 and traded to 80.32 from 72.26. WTI for the week on the highs side targets again 81.35.

SPX targets last week at 4222.00 fell short by 40 points as SPX traded to 1.4177 highs. This week, SPX targets 4197.42.

Brian Twomey Contact: brian@btwomey.com

FX Next Week: EUR,DXY, JPY, GBP

As written last week: DXY vital breaks are located at 103.29, 103.55 and 103.67. DXY broke 103.67 and traded to 104.01 in a dull 104 pip trade week. DXY was oversold from low 100.00’s and extremely close to the 99.00 break.

DXY supports are building below 104.00’s at 103.46, 103.39 and 102.23. Further down, 102.36 must break in order for the DXY downtrend to resume on a much quicker pace. Trade in the 102.00 to 104.00 range will offer another fairly slow trade week.

DXY 104.00’s and higher will struggle next week to move achieve further gains. Big short points next are 104.32 and 104.48 and a massive line at 104.80. Higher overall, DXY will struggler and move extremely slow.

SPX traded 87 points to 4176.73 highs from 4089.12 lows on a weekly target at 4222.69. Currently 47 points remain to target and 2 trade days. DXY’s range from 102.00 to 104.00 offers about 100 ish point range next week. The high side informs target at 4190.00’s.

Gold traded 25 points this week or 1/4 to DXY from 1899.12 to 1874.11. Next week targets 1902. and further gains ahead in upcoming weeks to high 1900.00’s.

WTI highs achieved 78.82 from 72.25 lows or 6 weekly points on a target at 81.32. WTI cracked above the massive 77.00 to 83.00 range. WTI hold supports at 75.00’s and 76.00’s and targets easily 79.00’s next week. Overall, WTI 6 weekly points is a fairly normal trade week.

EUR/USD must trade above 1.0618 to target 1.0915 by breaks at 1.0679, 1.0780, 1.0847. EUR topside averages are dropping against rising averages at the low end to inform a larger EUR move lies ahead in upcoming weeks.

AUD/USD higher must break 0.7006 to target 0.7052 and 0.7107.and trades an overall 118 pip range from 0.6887 to 0.7005. AUD becomes overbought above 0.6997.

EUR/AUD last week from reported tops at 1.5700’s and 1.5800 traded to 1.5658 and dropped 284 pips to 1.5374. EUR/AUD trades oversold from big break at 1.5420 and targets next week 1.5563. EUR/AUD must break 1.5420 to target again 1.5300’s.

GBP/AUD at big break at 1.7564 traded to the brink at 1.7550 then dropped 300 pips to 1.7200’s. Next week, GBP/AUD ranges from low 1.7400’s and long to 1.7500’s as 1.7538 is required to trade to 1.7600’s.

USD/JPY trades 124.88 to 133.38 and 133.48. We’re short next week around 131.68 to target the break at 129.98.

GBP/USD last week as written must break 1.2114 and 1.2144. GBP/USD traded to 1.2158 from 1.1960 lows. Next week target high 1.2200’s.

GBP/JPY trades 156.20 to 160.96 and 200 pips for the week from 157.00’s to 159.00’s. GBP/JPY breaks 156.00’s then JPY cross pairs trade 500 pips lower and USD/JPY follows.

EUR/JPY 141.50 then back to 142.00’s.

USD/CAD trades 1.3200’s to 1.3400’s for the past 2 weeks. USD/CAD not only contains a range problem but CAD fails to trade alongside DXY is a meaningful manner.

Currency markets trade next week in short ranges as DXY must decide its destiny by breaks lower at 103.00’s. This will force better trade environments and wider ranges.

Brian Twomey

RIP Peter Wadkins: A 48 Year FX Career

With much sadness on this day to report the passing of my long time friend Peter Wadkins. Peter was sick and in the hospital for Christmas. By New Years, the diagnosis was Pancreatic Cancer and the schedule for Chemo treatment. I don’t know what happened in the interim but Peter passed away last Saturday.

Many loyal friends on this blog would know Peter as I posted much to his FX and market writings at Thomson Reuters, advice to trades and markets and his famed yet highly profitable moving average model. Peter’s model is where I began way back in 2007? to know and understand trading from a moving average perspective and to profit from trades as my past trading life was a disaster. As Peter advised, central banks trade by moving averages and correct for us to trade alongside the central banks.

Peter was known and many commented to his flair and style of writing as he brought market prices to life with a depth of understanding known by no other. But not just from a price perspective as Peter well understood the economics of exchange rates from imports and exports, prices to interest rate rises and falls. Peter knew every last detail to exchange rates.

Peter placed a personality and hysterical commentary when required.

The leading FX people in 2012 were the Cycle Gurus, Jean Claude Trichet as ECB head was JC and the Sunshine Band, USD/CAD skyrocketed 200 pips, Hoochie Mama. I was Black Box Brian.

As Jamie Coleman wrote years ago in regards to Peter: Peter forget what we will never know when it comes to markets. This is where Peter’s expert commentary was highly regarded to Pros and across the world to millions of traders.

Peter was well respected and well known in a 48 year FX run.

Peter was born in the UK and traded FX forwards at the age of 19, just at the time of the 1972 free float. He was recognized by a highly regarded banker in the United Sates and brought to the bank.

In Peter’s words:

I am a skilled professional in the FX & money market space. I worked my way up through the ranks from trainee dealer to VP manager of corporate FX, chief spot dealer and eventually Treasurer. Over that time frame I have developed knowledge of spot and forward FX, FX Advisory/ sales, money markets / fixed income and emerging markets.

I introduced Asian NDFs to the New York brokerage market in 1997 and was the first desk manager to introduce Brazil NDFs as a mainstream product in New York.

I have managed sales desks, trading desks, brokerage desks and have been the Treasurer of two banks. I was a director of Forex USA from 1996-2000 and became president of the latterly re-named Financial Markets Association USA from 2000-2006.

I sat on the Foreign Exchange Committee of the Federal Reserve Bank from Oct 2000 – Dec 2003. I lectured on NDFs at NYU business school’s post-graduate class 1997-1999 and have appeared on many industry conferences/ TV outlets as a moderator, panelist or featured guest. I was the opening speaker at an in-house seminar for Reuters’ top 100 sales people

In addition, Peter was part of the team during the Argentine Peso crisis in 1982, on the CME floor in March 1983 as a bank Treasurer when AUD free floated , assisted test takers to the ACI FX exam and sat on the ACI board. Peter on his last day was involved with ACI.

From a personal perspective, Peter was my friend and as my friend, we maintained constant contacts over the past 15 years, 16? . Peter was generous and giving when it came to FX and markets. Peter was last at my house for 2 days last year to eat, drink and discuss FX and Models.

While Peter left us to reside in heaven, never will Peter ever be forgotten.

Brian Twomey

FX Weekly: EUR/USD V DXY, Gold, WTI, SPX

DXY at 100.82 traded deeply oversold and dangerously close to the 99.00 break while EUR/USD at 1.1032 became massively overbought and near the 1.1100 break. EURUSD was heading lower and DXY higher. The only question was how fast or how slow would prices travel.

NFP was a terrific bonus as EUR/USD was relieved of overbought conditions to now trade oversold while DXY oversold offers severely overbought at 102.00’s.

DXY vital breaks are located at 103.29, 103.55 and 103.67 then begins averages at every 100 pips to 114.00 highs. Below, DXY must break 101.90 and 101.75. Longer term, DXY must break 99.00, 98.00 and 97.00’s. Break at 97.00’s then DXY travels miles lower to 93.00’s.

The DXY. USD and USD/JPY trade strategy remains short only as DXY downside contains 400 pips to challenge the 99.00 support. DXY’s overall range is located from 99.00’s to 103.00’s.

Oversold EURUSD is held by supports at 1.0629 and 1.0705. Vital 1.0912 must break for EUR/USD to trade from 1.0912 to 1.1135. Higher targets are located at 1.0805, 1.0925 and 1.1048 as the final target. EUR/USD contains easy ability for the 1.1048 target to achieve its destination this week. EUR/USD long entry is found around 1.0755.

USD/JPY broke 129.65 and traded to 131.00’s. Shorts must again break 129.65 to target 128.00’s. USD/JPY overall trades 839 pips from 124.92 to 133.31. Lower this week for USD/JPY will trade 132.00’s to 124.92 to further compress the range. The final target at 121.00’s holds on a short only trade strategy.

GBP/USD must break 1.2114 and 1.2144 then the target becomes 1.2418 on a long only strategy. GBP/USD is required to break 1.2584 to target 1.2700 as the final destination.

AUD/USD targets 0.6940, 0.6973 and 0.7105 while NZD/USD targets 0.6428, 0.6512 and eventual 0.6601. NZD/USD big line break above is located at 0.6492.

Gold

As EUR/USD travels higher, Gold targets 1975.88 and 1982.22 on a long only strategy. Shorts begin at 1975.00’s. As DXY approaches 99.00’s and 400 pips of downside, Gold has ability to trade 2034.49. Driving Gold higher is average supports below at every 100 pips from 1800.00’s.

SPX

Weekly target is located at 4222.69. SPX supports are located at 4100.00’s, 3900.00’s and 3700.00’s. Expect SPX to travel higher on a slow slow grind as current averages fail to support much higher to 4300’s over the next month. SPX 5000 is a current dream rather than reality.

WTI

WTI ranges from 77.00’s to 83.00 and 85.00’s. For the week, target is located at 81.32. Above 85.00’s, WTI travels much higher.

EUR/AUD Vs GBP/AUD

GBP/AUD’s big break for higher is located at 1.7564 and targets 1.7700’s easily. GBP/AUD trades deeply oversold on a long only strategy. The problem to GBP/AUD is overbought EUR/AUD. EUR/AUD’s top is located 1.5700’s and 1.5800’s and can’t handle much higher in the short term. The GBP/AUD and EUR/AUD relationship has been off kilter for the past 2 months and doesn’t appear to stabilize anytime soon.

USD/CAD sits at do or die at 1.3382 and massive support at 1.3131. USD/CAD’s next target below is found at 1.3232 however USD/CAD will struggle to trade lower at 1.3309. The final target at 1.3113 holds.

GBP/JPY trades 156.28 to 161.34. JPY cross remain on a short only strategy to trade lower alongside USD/JPY. The big 3 JPY cross pairs remain GBP/JPY, EUR/JPY and CAD/JPY.

Overall best trades for 2023 remains EUR/USD, GBP/USD, USD/JPY and JPY cross pairs GBP/JPY, EUR/JPY. GBP/CAD is the better trade to EUR/CAD, EUR/NZD over GBP/NZD and EUR/AUD over GBP/AUD.

Brian Twomey

NFP History: Revised

This article was written in 2017 so slight difference to overall numbers however today was included revisions. The BLS once offered data to 1939 and the full data for each category from the day of inception. Today is different as data goes back about 10 to 20 years depending on the category.

For NFP numbers, 10 years and possibly 20 may or may not be enough data for an accurate forecast. Every month is different as the location of the data from month to month ranges. If the NFP data for this month is located at the 20 year average then we know NFP is to high. Same concept if data is found at the lower averages.

Total employed persons in the United States stands at approximately 159,224, 000, 000. For NFP we want to know the changes to 100,000. Overall, NFP is a minor release in comparison to the total.

The most stunning number is the Participation Rate and the steady decline since 2004. Analysts would view this phenomenon as many who left the workforce. I don’t agree.

I see the low participation rate as primarily the poor to middle person class. All are employed and working in the underground economy as this class would lose and remain much poorer to work within the system. As taxes rise and job openings become scarce, an entire class of working persons is never to return to the workforce or become a statistical number to the system.

Some call this phenomenon the Great Resignation. Within the context of various states and neighborhoods, underground workers are doing just fine.

As the Participation Rate drops further then the class of persons to join the underground economy grows.

History of NFP

Non Farm Payrolls

Non Farm payrolls began reporting in 1939 with passage of the 1938 Fair Labor Standards Act to also give us a maximum 44 hour work week and Minimum Wage that began at 25 cents per hour.

Today’s Minimum Wage at $7.25 vs 0.25 cents offers a mid rate at $3.75 and $5.12 at 10 per hour.

Non Farm Payrolls traditionally held to 50,000 per month changes to match Thursday’s Weekly Continuing Claims unemployment data. The average change for 2022 was 146,000 Vs a guaranteed movement within 100,000.

Since 2012, reporting months average changes range from September and August lows at 187 and 188 and June at 197 to high months in February at 318, January 273 and November at 252.

Participation Rate

Participation Rate current: 62.3. Since 2008 = 60.8 May 2022 to 66.2 January 2008. The Participation Rate since 2008 has been traveling lower on a steady decline. Range 61.0 to 66.0 or 5 points.

The overall drop from 66.0 highs began in 2002. The participation rate breaks down to 70% men and 58% women, 62.1 to 62.4 for white and blacks, 64.2 for Asians and 66.3 for Hispanics.

From 2021 to 2022, the Participation Rate ranged from 61.7 to 62.3.

Participation Rate. Began January 1954 as a formal release. From January 1954 – August 1969, the Participation Rate ranged between 58.0 – 59.0. Only 4 times was 57 seen during this period and 3 of those times was in 1954. 58.0 was seen 112 months during this 180 month total and a slight bit higher than half of the 90 month average.

From the latter part of 1969 – 1973, the Participation Rate steadily increased to reach first ever 60.0 and began a slow climb to current 62.8. But 62.8 is quite low historically and hovered in the 62 range from 2012 – 2014. Year 1984 saw the highest ever since release inception to 64.0 while the 1990’s experienced 67.0.

Employment Population Ratio

Employment Population Ratio. Began in 1954 at 55.5 and again saw a steady increase to 2017 at 58.0. But 58.0 is off from historic 64.0 and 65.0 highs between 1996 – 2006. From 2009 – 2014, the average reports at 59.0.

From 2004 to 2022, current Employment Population Ratio stands at 60.0 against lows achieved at 51.3 in April 2020 and highs at 63.4 in December 2006. The Employment Population Ratio has been steadily declining since 2006 highs at 63.4.

Men dominate the workforce at 67.7, Women at 56.5. Whites account for 59.9, Blacks 58.3, Asian 63.2 and Hispanics at 63.1.

Seasonal Employment

Seasonal Employment. Began in 1954 at 53,000 persons and again a steady rise to highest ever 120,003 in December 2007. In 2017, employed accounts for 117,186. The numbers exploded from 2000 – Present and never saw a low of 100,000.

Unemployment

At Today’s 2022 rate, 5.7 million are unemployed and 2.1 million unemployment claims.

Unemployment Levels. From 1954 and 2000 lows, Unemployment levels ranged between 2000 – 5,000 until 2009 when Unemployment exploded higher to first ever 100,000.
Unemployment Rate. From 1954 – 2017, the Unemployment Rate ranged between 3.0 lows – 9.0 in 2009 and 2017 at 4.8.

The Unemployment rate from 2002 to 2022 ranged from 13.2 highs to current 3.5. The rate at 3.5 was reported 5 times since 2019.

Not in Labor Force. From 1975 – Present, the figure bounced between 51,000 – 73,000 highs but has seen a steady increase over the years. A possible reason is the introduction of Unemployment Insurance beginning in the late 1960’s then the pile on Bills to accompany disability, Unemployment extensions and Disaster Relief.

Union Membership. From 1983 – 2014, membership dropped from 17, 717 to current 14,576, 11.1% of the workforce are union wage workers V 20.1% in 1983. Union membership has seen a steady decline from first reported in 1983. In terms of actual workers, today 129,000 V 140,347 in 1983.

Federal Government. Totals workers in the Federal Government 2, 744, 931. A few of the highest

agencies. Total Postal workers 579,000, Homeland Security 196,799, Natural Resources 178,000, police Protection 192,21

Brian Twomey

FX Next Week: EUR/USD Target 1.1001 Achieved

EUR/USD target at 1.1001 achieved yesterday. As written November 11 when EUR/USD traded 1.0200’s, Long term targets 1.0592, 1.0798 and final at 1.0967. The target at 1.0967 was since adjusted to 1.1001 by model dictates. The model requires a re check to targets at about every 500 pips of movements.

As seen here, the difference to targets since November was 35 pips yet not a waste of time as my entire structure over the past 12 and 15 years was to hit any target perfectly and construct MA models to ensure targets achieve destinations. See btwomey.com for gabillions of 10 and 12 year past trades long and short term. Obviously the program became a huge success.

Yesterday’s target at 1.0998 from 1.0903 achieved also. EUR/USD traded to 1.1032 highs and 6 pips shy of the next big break at 1.1038.

As a trade begins at entry and ends at target, trade requirements are click for entry and exit then walk away as stops, charts and the latest market talk is totally irrelevant.

EUR/USD now trades the range from 1.0909 to 1.1133 and next big levels at 1.0994, 1.1036, 1.1079 and exactly 1.1100. EUR/USD must decide to break 1.1133 to trade the next 200 pip range from 1.1133 to 1.1344 or 1.0705 to 1.0909 then 1.0625 to 1.0705.

Not only is EUR/USD approaching do or die at 1.1133 but higher EUR/USD will see a slowdown to prices on the path to 1.1133. EUR/USD will either break 1.1133 and skyrocket or experience a deep drop as required by principles of moving averages.

EUR/USD is deeply overbought from 1.0625 and 1.0705. Next week shorts target easily 1.0891 and again the bottom at 1.0824.

Oversold USD/JPY targets next week easily 129.65 and 130.11.

GBP/USD’s target remains 1.2750 on a break of 1.2586. GBP/USD then enters the range from 1.2586 to 1.2895 from current 1.2128 to 1.2586 at 458 pips.

AUD/USD remains 0.6998 to 0.7140. Higher targets 0.7179 and 0.6924 on a break of 0.6998. Overall, AUD trades deeply overbought from 0.6800’s.

DXY is the driver to markets and currency prices. DXY yesterday traded to 100.82 and 32 pips short of the next big level at 100.50.

EUR/AUD 1.5402 decides its fate for higher or lower. Massive oversold GBP/AUD back to 1.7520 on breaks of 1.7268, 1.7331, 1.7394, 1.7457.

GBP/JPY 156.34 to 161.62 and no change this week. EUR/JPY 135.00’s to 141.55. Shorts located at low 142.00’s.

EUR/CAD achieved 1.4641 highs yesterday. Middle 1.4400’s remain big breaks to target 1.4600’s and 1.4700’s or 1.4200.

Brian Twomey

February Trade: GBP/USD, USD/JPY, AUD/USD

GBP/USD trades 1.2121 to 1.2583. The break of 1.2583 coincides to DXY 99.00’s. DXY must break lower in order for GBP 1.2583 to break higher. For February, GBP/USD 1.2500’s are many and massive. Plus GBP/USD becomes overbought at 1.2500’s.

DXY hold at 99.00’s then range becomes 99.00 and 100.50 to 103.00’s or a 300 ish pip range.
Failure to break 1.2500’s, then means shorts all month at 1.2400’s. GBP/USD provides solid supports at 1.2100’s as many averages exist at 1.2100’s. The bottom averages are rising and fairly quickly. Bottom average rises are positive to GBP for the eventual 1.2500 break.

Overall strategy is short 1.2400’s and long 1.2200’s.

EUR/USD for the month of February since 1999 traded 13 down months to 9 months higher. Since 2008, EUR/USD traded 4 months higher to 9 months down. Historically, February is a fairly light and range trade month.

EUR/USD big break is located at 1.0903. Higher targets 1.0998 and lower 1.0803, 1.0770.

USD/JPY traded 125.03 to 133.62. Note USD/JPY 125.03 and GBP/USD 1.2583. GBP/USD break higher above 1.2583 then USD/JPY breaks 125.03 and trades much lower to 123.00’s then 122.00’s.

USD/JPY vital supports for the month of February are located at 126.00’s. USD/JPY at 133.62 must hold for shorts to continue. The eventual path to 133.00’s is to travel next to 132.00’s. If 133.00’s breaks on a fluke then USD/JPY can trade to 135.00’s and 136.00’s easily for the month of February.

AUD/USD trades 0.6998 to 0.7140 and the same location for the past 2 weeks. Below 0.6998 targets 0.6911. Above 0.7140 targets 0.7172.

AUD/USD for the month of February can trade easily to 0.7200’s at 0.7255 target. AUD/USD must hold 0.7140 and 0.6998. AUD/USD is the more favorable currency to EUR/USD and GBP/USD as AUD has great ability to trade wide and free.

AUD/USD above 0.7140 maintain a range from 0.7140 to 0.7384 and a long drop strategy.

FED Funds, Yield Curve

Whatever Powell and the Fed decides on this day, the final determination is located inside the day trade and longer term ranges and targets. We should see a minimum 50 pip move and maximum at 100.
The FED is most vital because DXY affects every market price on the planet.

Yield Curve and Fed Funds

Fed Funds Rate Averages from 26 to 31 years. Not oversold or Overbought
Range: 1.69 to 6.95 and 6.98
Mid 4.32, Current 4.33

Yield Curve Average 4.26
Range 3.84 – 4.68

25 Point raise =4.45
50 = 4.68 or top of Yield Curve exactly

AUD/USD and RBA
The RBA raised 25 Points on December 6
AUDUSD traded 63 pips for the day and 30 pips on the announcement.
ASX 200 traded 53 Points for the day while AUD, Gold and XAUAUD traded 23 points.

Currency Price dictates all financial Instruments.
Stocks, Gold, Silver won’t ever trade more than a Currency price.

Brian Twomey

EUR/USD V DXY February Levels and Targets and Interest Rates

If DXY and Fed interest rates were excluded from markets then no such concept as currency markets would exist. If DXY and Fed interest rates were excluded from American markets then all financial instruments associated with DXY and Fed interest rates would trade as a wild west concept or volatility x 10 x 100 X unknown.

DXY and Fed interest rates are the vital components to not only force currency and market prices to move but both dictate how far and to trading concepts as ranges and targets. As Fed interest rates are released daily, all central banks comply to interest rates to report the exact same interest rates and to trade alongside Fed interest rates.

Now we have a market price for currencies and all financial instruments against known ranges and targets.

DXY and EUR/USD from a day trade perspective shares a 7 and 8 pip relationship. Not much difference except each are total opposites. The minimal DXY and EUR/USD must trade on a day trade is 15 points. If DXY drops 8 pips, EUR/USD trades higher by 7 pips. If DXY trades higher by 7 pips then EUR/USD drops by 8 pips.

The DXY and EUR/USD relationship is permanent unless central banks open wider to interest rates. Central banks won’t release their total interest rate control. The direction for central banks is to further compress interest rates to flatten daily ranges.

Daily ranges are flattened by the interest rate parity curve to move by 0.01 and 0.02 daily and to in turn constrict interest rate maturities to more than tight ranges.

Daily ranges currently compressed to the lowest common denominator since the 1972 free float.
From a maximum perspective. A currency price must trade at least 50 – 60 pips per day. This accommodates for DXY to SPX at 30 and 40 ish points, XAU/USD and Gold at 20 ish points and WTI at 2 points. The VIX is gone and may never come back to life as it trades about 1 1/2 points per day.

DXY and EUR/USD each moved 1300 ish pips by averages at every 200 pips with 100 pip targets. As targets materialized, new averages developed. EUR/USD and DXY’s best moves occurred at breaks of 109.00’s and 0.9800. Once EUR/USD broke 1.0500’s and DXY 103.00’s, both price movements died.
For the month of February, EUR/USD becomes overbought at 1.1040 and a short strategy implemented.

EUR/USD requires 2 big breaks at 1.0973 and 1.0995. At 1.0995 can trade easily and targets back to 1.0800’s. Look for targets at every 100 pips.

DXY becomes oversold at 100.50 and 99.46. The month of February may not see the big 99.00’s break yet DXY has every ability to challenge 99.00’s.

The overall EUR/USD and DXY moves have been miserable and meager as each failed to trade not even close to full potential. Except for the month of November.

Monthly Ranges January 9

From January 9 monthly ranges. USD/CAD 1.3736 to 1.3335. Actual 1.3684 to 1.3298.

GBP/USD 1.1946 to 1.2490. Actual 1.1840 – 1.2447. NZD/USD 0.6187 to 0.6554. Actual 0.6190 to 0.6529.

USD/JPY 135.70 to 129.78. Actual 134.76 to 127.20. AUD/USD 0.6588 to 0.5932. Actual 0.6687 to 0.7141.

EUR/NZD 1.6267 to 1.7075. Actual 1.6670 to 1.7038.

Brian Twomey

FX Weekly: Levels and Targets

DXY traded 95 pips last week, 136 in the prior week and 186 pips 3 weeks ago. DXY’s 1400 pip drop from 114.00’s over the past 4 months was fairly easy as DXY traded above 50 year monthly averages. Corrections higher were shallow as averages materialized every 100 pips above the current price.
DXY is no different today as it was 4 months ago. Averages are positioned every 100 pips from 102.00’s to 109.00’s and 109.00’s to 114.00’s.

Partial explanation to a 95 pip trade week was DXY now approaches 99.97 and 98.89 then 96.00’s and 95.00’s. The overall bottom from current analysis is located at 92.00’s.

On the opposite side is EUR/USD and rising averages. The January 12 lineup 1.0457 to 1.0847 or 390 pips Vs today 1.0596 – 1.0898 at 302 pips. While EUR/USD bottom side averages at 1.0500’s won’t break anytime soon, EUR/USD top averages gain no traction to propel EUR/USD higher. DXY is required to move lower in order for EUR/USD prices and averages to travel higher.

EUR/USD failed to hold the range from 1.0800’s to 1.1100’s as bottom side averages became deeply overbought. EUR/USD at current 1.0596 trades perfectly neutral.

EUR/USD Targets

Above 1.0898 targets 1.0942 and 1.0968 and easily achievable. Next for EUR/USD targets are located at 1.0995, 1.1038 and 1.1077. EUR/USD at 1.0995 becomes overbought and adoption to a short only strategy.
EUR/USD bottom at 1.0829 holds first support then 1.0705. The overall target reported in December at 1.1001 holds. December lows held at 1.0300’s.

Driving markets is DXY trading lower by 100 pip increments to EUR/USD’s rise by 100 pips. DXY’s failure to continue lower then EUR/USD could easily consolidate in a 1.0596 to 1.0898 -1.0900 range. DXY’s break at 99.00 and 98.00 then EUR/USD automatically travels much higher and topside averages continue a slow climb higher.

The Week

The commonality to EUR/USD, AUD/USD, NZD/USD and GBP/USD is bottom side averages rose significantly over the past month while topside average remained stable.

USD/JPY trades 125.04 to 133.68 or an 864 pip range. Previous range was located from 125.00’s to 135.00’s. or 1000 pips. USD/JPY continues a slow grind lower as it follows DXY’s descent. DXY’s break at 99.00;s and 98.00’s then lower for USD/JPY to challenge 125.00;s.

USD/JPY opens the week oversold and short opportunities.
GBP/USD trades 1.2114 to 1.2578 or 464 pips. December 22, GBP/USD traded 1.1988 to 1.2542 and 1.2551 or 554 pips. GBP/USD trades overbought from 1.2114 and reveals 1.2500’s remain elusive to a break anytime soon. Short highs is best strategy.

JPY Cross Pairs

JPY cross pairs trade oversold to match oversold USD/JPY.

EUR/JPY 135.00 ‘s to 141.47. GBP/JPY 156.30 to 161.47, CAD/JPY 95.11 to 99.16, GBP/JPY 156.30 to 161.77.

AUD/JPY at 92.00’s trades far to high especially in relation to counterpart JPY cross pairs. Look for a break at 91.79 for shorts and a lower price.

AUD/USD and NZD/USD

AUD/USD 0.6874, 0.6992, 0.7138 and 0.7196.
NZD/USD trades overbought within current range at 0.6316 to 0.6638.

USD/CAD and Cross Pairs

USD/CAD contains serious range problems. Higher must break 1.3394. GBP/CAD trades 1.6224 to 1.6700’s and 1.6800’s.
AUD/CAD trades massive overbought and targets 0.9389
EUR/CAD trades the exact same as last month. EUR/CAD middle 1.4400;s decides EUR/CAD 1.4200’s or 1.4600’s and 1.4700’s.

GBP/AUD Vs EUR/AUD

GBP/AUD trades severely overbought. Trade strategy remains long to target easily 1.7503. Many rounds of shorts exist all week.

EUR/AUD long this week matches longs to GBP/AUD.

EUR Vs EM

EUR/HUF and EUR/RON in the EM space trade deeply oversold and a reat long opportunity. Remainder EUR vs EM trades dead neutral.

Brian Twomey

FX Next Week: GDP, USD/CAD, CAD/MXN, Imports

GDP today last 3.2 and 2.6 consensus. While GDP averages may not trade overbought or oversold. at 3.2 and 2.6 remains far to high an overall price as 2.6 is located between the 10 and 11 year averages from 2.29 to 2.37.

The Atlanta Fed Now offers 3.5. The 3.5 is located at averages 3 year, 6 and 7. The 7 year average is perfect to the Atlanta Fed’s forecast. But still to high an overall price.

GDP’s proper location and any economic release is between the 1 – 5 year average. The 3.2 and 2.6 is today located above the 10 and 11 year averages and signifies to high a price.

The Atlanta Fed forecasts GDP by updates to each economic release then predicts GDP by using weather as a forecast tool. The weather aspects verifies my claim over years to purchase weather books to learn and understand a market price. Weather is statistics in action and the older the books the better, less expensive and more examples to Statistics.

In market trading is spoken ranges. In Weather books is taught the breakdown to ranges as Terciles, Quintiles, Quartiles, Deciles for 3, 4, 5 and 10. The market price is now scaled from 3 to 10 but overall must scale is 1 to 10.

Easier than the Atlanta Fed is obtain the GDP data from the RBNZ. The RBNZ will post today’s GDP data tomorrow so traders are prepared for the next GDP release. AS well GDP is the insight to all economic releases.

The data allows for negative GDP forecasts as done in July.

Next Week

AUD/USD achieved target at 0.7082 as written January 9. Ranges are located at 0.6831, 0.6986 to 0.7135.
EUR/USD ranges 1.0579 – 1.0892 or 313 pips and 1.0892 to 1.1127. The range from 1.0579 to 1.0892 is slowly compressing as the range lost about 40 pips this week.

EUR/AUD big break for higher is located at 1.5446 and oversold begins at 1.6267.

GBP/AUD as the better trade to EUR/AUD remains deeply oversold and targets 1.7546.
GBP/AUD trade strategy is the same as 2 weeks ago to long any price at 1.7300’s and 1.7400’s. Each trade long should contain a 50 pip profit and 3 and 4 rounds of longs exist.

GBP/USD trades 1.2096 to 1.2551. GBP/USD must begin a more concerted process to break 1.2551 or GBP/USD drops to low 1.2300’s and high 1.2200’s.

GBP/JPY big break at 156.29 moved higher by 16 pips in 2 weeks. GBP/JPY ranges from 156.29 to 161.78.

EUR/JPY lower on a break at 141.46.

USD/JPY trades oversold and targets higher at 130.03. Any price over 130.03 is a bonus to shorts.

USD/CAD, CAD/MXN and Imports

USD/CAD trades in a 300 pips range from 1.3300’s to 1.3600’s and fails to trade alongside DXY.

USD/CAD is driven by Import Prices to the United States. Imports hit a 2020 April low at -6.8. USD/CAD followed the continuous import price drop from -1.3 in February 2020. Then began a slow rise.

CAD/MXN skyrocketed from February lows at 13.97 to 18.17 highs in April. Then began the slow descent.
Import prices trade dead center from March 2022 highs at 13.0 to -6.8 at April’s lows.

Next Import price release is scheduled for February 17.

USD/CAD big break is located at 1.3412 and CAD/MXN at 14.40.

Brian Twomey

FX: 300 and 600 Pip Ranges

DXY began January 2022 by breaks higher at the 95.00 and 96.00 averages at 5 an 50 year then traveled 1900 pips while EUR/USD broke the 5 year average at 1.0800’s and eventually 50 year.

EUR/USD traded 1300 pips to 95.00’s Vs 1900 for DXY or a difference of 600 pips. DXY broke January while EUR/USD broke below 1.0800’s in April or a difference of 3 months.

EUR/USD achieved 95.00’s in 5 months while DXY traded to 114.00’s in 8 months or a difference of 3 months.

EUR/USD 5 year average is located at 1.1340 and the 50 year within the vicinity.

EUR/USD currently trade a 240 pips range from 1.0885 – 1.1125 or a 298 pip range from 1.0587 to 1.0885.
AUD/USD trades 0.6830 to 0.6980 or 150 pips and 0.6980 to 0.7133 or 153 pips. AUD trades 1/2 to EUR/USD ranges but 303 pips from 0.7133 – 0.6830 or the exact same as EUR/USD.

DXY monthly averages posted September 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

From 99 to 96.00 or 300 pips, 95 to 92 or 300 pips, 91 to 88.00 or 300 pips. All averages are valued at 1100 pips or 1/2 at 550 or 275 pip intervals.

SPX from December 14 traded a 240 point range from 3774.69 to 3534.40. . SPX broke above 3774 to trade highs at 4039.16 or 264 pips.

EUR/USD range on a 5 year average is 600 pips and 900 on a 10 year average or a difference of 300 pips.
All trading life regardless to any financial instrument begins at 3 and 6 and 300 and 600 to signify ranges and targets.

EUR/USD target reported in December is 1.1001 between a 300 pip range at 1.0885 to 1.1100;s but EUR/USD was forced to break the first 300 pip range from 1.0500’s to 1.0800’s for a 600 total or 300 X 2 ranges.

Ranges at 3 and 600 derived from the 3 month and 6 month interest rate first introduced in the 1930’s. Most vital is the 3 month as the first constant to markets. The 3 month rate held as a constant in the 1940’s as the Fed began interest rate control to the 3 month rate so inflation would trade beneath.

As markets became settled in the modern day, 300 and 600 ranges became a main component to trade markets and view prices on a long term basis. The common theme to prior long term trades posted over many past years is 600 pip targets. The recent JPY trades all achieved 700 pips or a 100 pip bonus.

On a daily trade basis, prices trade 3 and 6 intervals to replicate daily interest rate moves.

The concept to 3 and 600 will remain a constant to markets for years and possibly decades in the future.

Brian Twomey

FX Weekly: GDP, EUR/USD and Trade Levels

DXY traded to 101.54 lows last week and closed 101.99 at the previous week’s low. Highs achieved 102.90 inside a 136 pip trade week. DXY’s vital levels at 102.95 and 103.29 held yet brought markets and prices directly to the brink.

DXY’s 102.90 allowed EUR/USD to break 1.0866 and trade to 1.0886, AUD/USD broke 0.6977 to trade 0.7062 and NZD/USD 0.6458 traded to 0.6529. GBP/USD traded to 1.2435 highs to further challenge the break at 1.2551.

DXY’s important levels this week are located at 102.21, 102.75, 103.06 and 103.57. From low 103.00’s, averages are positioned every 100 ish pips above and places DXY on a continuation to short only strategies.

GDP reports Thursday. GDP defined is 3 letters and factors the exact same moving averages as DXY or EUR. GDP is known as an economic release while EUR or DXY is classified as a market traded document. The difference between GDP and EUR/USD is ranges as GDP ranges are tiny in relation to EUR and DXY.

As reported from the RBNZ as they post GDP numbers after every release, GDP numbers 4.05, 3.89, 3.81, 3.73, 3.65. 3.58, 3.52, 3.45, 3.33. The Atlanta Fed holds at 3.51 and above 3.2 from Q3 2022.

The problem to Thursday’s release is GDP averages from 1 to 11 years trades in a tiny range as average are neither overbought or oversold but contain targets within 3.89 to 3.45 and 3.33.

No surprises are expected however the consensus estimate at 2.8 assumes a break at the 11 year average at 2.29 to then place GDP’s next release in February within 2.39 to 2.37 and 2.05.

EUR/USD Vs USD/EUR and DXY

EUR/USD trades a range from 54 to 108 daily pips Vs USD/EUR at 47 and 94 pips. Very few EUR/USD pips trade on any trade day. DXY trades 51 or 102 daily pips yet EUR/USD was constructed as opposite USD and driven exclusively by USD.

The Week

We’re cautious this week to a long USD as USD/JPY and USD/CAD and short non USD strategy particularly when EUR, GBP, AUD and NZD trade just below vital levels. Without breaks above significant range points to begin a new 300 pip range and trend then severely overbought range points at below averages warrants shorts to EUR, AUD, NZD and GBP.

Despite shorts, best short targets are located at 120 to 150 pips. EUR/USD for example targets 122 pips below to 1.0732. The DXY trend lower and 96.00 at the 50 year average is to powerful a downtrend to warrant a EUR or non USD correction to travel much lower than 120 and 150 pips. More than 150 pips assumes DXY trades to middle 103.00’s.

DXY Levels: 102.21, 102.75, 103.06 and 103.57.

EUR/USD trades 1.0547 to 1.0882 or 335 pips and no changes from prior weeks. Next above 1.0882 is located 1.0918 and 1.0933.

USD/JPY trades from 125.13 to 133.96 and 134.54. While 125.13 holds fairly steady over the past month, USD/JPY upper averages dropped about 100 pips from 135.00’s. USD/JPY above averages will continue a slow drop lower.

JPY Cross Pairs

We’re cautious to USD/JPY longs and JPY cross pairs this week and view the best trades as CAD/JPY,

GBP/JPY and AUD/JPY as a distant 3rd. NZD/JPY is least favored especially over past months as NZD/JPY lacks range and without a clue to weekly moves except to follow AUD/JPY. EUR/JPY also lacks excitement as EUR/JPY begins the week dead neutral without a purpose. Best NZD/JPY and EUR/JPY strategy is short highs and long lows as both will follow leaders GBP/JPY and CAD/JPY.
The attraction to GBP/JPY and CAD/JPY is ranges offer movements, best profit opportunities and trade signals are fairly clear.

GBP/JPY 156.16, 159.30, 161.39 and 162.45.
CAD/JPY 95.13, 99.83 and 100.81.

EUR/JPY 135.27, 140.93 and 141.10.
AUD/JPY 86.92, 91.25 and 91.32.
NZD/JPY 80.45, 82.21, 83.97 and 83.99.

Above targets for the week are located in the same EUR/USD range as 120 and 150 pips.

AUD/USD and NZD/USD

AUD/USD 0.6819, 0.6977 and 0.7132. Next above 0.7027.
NZD/USD 0.6277 to 0.6469. Next above 0.6484 and 0.6492.

GBP/USD trades in wide ranges from 1.2061 to 1.2306 and 1.2551.

GBP/AUD 1.7688 to 1.7999.

USD/CAD over the past 2 months trades 1.3300 to 1.3500’s and 1.3600’s. Until the 1.3300 range breaks to target 1.3200 and final at 1.3100, the range trade remains best strategy.

Trade Ranks

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

Best overall: EUR/USD, USD/JPY, AUD/USD, EUR/CAD, NZD/USD, CAD/JPY, USD/CAD.

GBP Best trades: GBP/USD, GBP/CAD, GBP/AUD.

Brian Twomey Contact: brian@btwomey.com

History of NFP

A larger extension exists to this article but can’t find it on site here. This article was written in 2017? so slight difference to overall numbers.

History of NFP

Non Farm payrolls began reporting in 1939 with passage of the 1938 Fair Labor Standards Act to also give us a maximum 44 hour work week and Minimum Wage that began at 25 cents per hour.

One aspect regarding Non Farm Payroll releases is the incredibly large Standard Deviations that accompany this release. It was devised in this manner to allow reported wide ranges month to month.

Participation Rate. Began January 1954 as a formal release. From January 1954 – August 1969, the Participation Rate ranged between 58.0 – 59.0. Only 4 times was 57 seen during this period and 3 of those times was in 1954. 58.0 was seen 112 months during this 180 month total and a slight bit higher than half of the 90 month average.

From the latter part of 1969 – 1973, the Participation Rate steadily increased to reach first ever 60.0 and began a slow climb to current 62.8. But 62.8 is quite low historically and hovered in the 62 range from 2012 – 2014. Year 1984 saw the highest ever since release inception to 64.0 while the 1990’s experienced 67.0.

Employment Population Ratio. Began in 1954 at 55.5 and again saw a steady increase to present 58.0. But 58.0 is off from historic 64.0 and 65.0 highs between 1996 – 2006. From 2009 – 2014, the average reports at 59.0.

Seasonal Employment. Began in 1954 at 53,000 persons and again a steady rise to highest ever 120,003 in December 2007. Today employed accounts for 117,186. The numbers exploded from 2000 – Present and never saw a low of 100,000.

Unemployment Levels. From 1954 and 2000 lows, Unemployment levels ranged between 2000 – 5,000 until 2009 when Unemployment exploded higher to first ever 100,000. Today Unemployment is 5872ish

Unemployment Rate. From 1954 – Present, the Unemployment Rate ranged between 3.0 lows – 9.0 in 2009 and today is 4.8.

Not in Labor Force. From 1975 – Present, the figure bounced between 51,000 – 73,000 highs but has seen a steady increase over the years. A possible reason is the introduction of Unemployment Insurance beginning in the late 1960’s then the pile on Bills to accompany disability, Unemployment extensions and Disaster Relief.

Union Membership. From 1983 – 2014, membership dropped from 17, 717 to current 14,576, 11.1% of the workforce are union wage workers V 20.1% in 1983. Union membership has seen a steady decline from first reported in 1983. In terms of actual workers, today 129,000 V 140,347 in 1983.

Federal Government. Totals workers in the Federal Government 2, 744, 931. A few of the highest

agencies. Total Postal workers 579,000, Homeland Security 196,799, Natural Resources 178,000, police Protection 192,21

Brian Twomey

GBP/CAD and EUR/AUD

GBP/CAD as written December 13: GBP/CAD trades from 1.6392 to 1.6767 or 1.6767 and 1.6892 to 1.7300’s.Today and 1 month later, GBP/CAD trades from 1.6468 to 1.6796 or 1.6796 to 1.6912 and 1.7095.

The larger range is located from 1.6146, 1.6468, 1.6796, 1.6912, 1.7095.

Overall, GBP/CAD trades in a range from 1.6448 to 1.6796. At 1.6448, GBP/CAD’s price is oversold and low while GBP/CAD becomes to high at 1.6796. To high at 1.6796 informs GBP/CAD will struggle to not only break but sustain its price above 1.6796.

Any price below 1.6511 then longs apply to target the range above 1.6581 to 1.6796.

EUR/AUD as written December 14th, EUR/AUD averages are located at 1.5543 and 1.5576 above and below at 1.5382 and 1.5364.

Today’s averages are located at 1.5381, 1.5407, 1.5469, 1.5598, 1.5609. Best trade strategy is short high 1.5700’s and low 1.5800’s to target 1.5686.

As EUR/AUD fails to overbought and oversold concepts, EUR/AUD’s price at 1.5400’s and 1.5300’s is to low and and will fail to maintain lower levels as EUR/AUD must travel higher.

Overall, EUR/AUD must maintain the range from 1.5686 to 1.5400’s and 1.5300’s on a short only strategy inside a 200 pip range. The far better trade is GBP/AUD as GBP/AUD dropped from reported 1.7999 to 1.7700’s and 200 pips.

Not much happening to EUR/AUD while GBP/CAD is acceptable but nothing special.

Brian Twomey

FX Next Week: Trade Opportunities

EUR/USD for January 2023 is on track to record a positive up month however 8 trade days remain to complete the month. EUR/USD’s 23 year historic scorecard for January factors as 14 down months and 8 months higher. A positive January changes to 14 down and 9 up.

EUR/USD’s track record since 2008 factors as 8 down months to 6 months higher and 2019 ended as a Doji candle. To bank on seasonality as a trade strategy is almost a 50/ 50 proposition however trades for down month profits ran multiple 100’s of pips to result as terrific trades.

The true drivers to currency and all market prices are DXY, interest rates and correct moving averages by Statistics or interest rate moving averages. The difference between a correct average by Statistics and interest rates for day trades is extraordinarily small. Both are the same and generate profits for multiple longs and shorts.

Here’s EUR/USD rates: 1.895 , 1.980, 2.335, 2.878,3.339 and compared to the BOJ and USD/JPY as 1.001, 0.989, 0.930. All day trades and all nation’s interest rates lead to 1.0 parity.

Interest Rates

FED 4.33, ECB STIR, GBP Sonia, CAD Corra & Overnight Money Market Finance Rate, NZD OCR, AUD OCR, BOJ Call rates and CHF Saron, Debt Register Claims and Tom Next or better known as Tomorrow Next. The change to market movements occurred in 2016 as central banks re arranged the interest rate trade formula from free float to hold vital interest rates constant from day to day. Market movements were slashed to almost 1/2 compared to free float interest rates.

From interest rates is derived support and resistance levels as: EURUSD every 6 and 7 pips, GBPUSD every 7 and 8, USDCAD 8 and 9, EURJPY 8 and 9, AUDUSD 4 and 5, NZDUSD 4, GBPJPY 10 to 21, DXY every 6 and 7. EUR/AUD 9, USD/JPY 8 and 9.

Most vital to market prices is very few exchange rates and other financial instrument prices are significant.

Next Week

DXY traded to 101.54 lows this week as last week’s levels held at 102.95 and 103.29. Next week’s vitals are located at 102.73, 103.60, 103.68 and 104.34.

EUR/USD next week trades from 1.0527 to 1.0873 and 1.1100’s. EUR/USD trades a 346 pip range vs last week’s 380 at 1.0486 to 1.0866. EUR/USD ranges are slowly compressing week to week. The final target at 1.1001 holds.

GBP/USD trades 1.2026 to 1.2551. Above 1.2551 targets the previously written level at 1.2700’s.
AUD/USD target from January 9 at 0.7086 traded to 0.7062 highs yesterday. AUD lows January 10 was 0.6859.

AUD/USD trades from 0.6803 to 0.6973 and 0.7131.

NZD/USD from January 9 Final target at 0.6569, NZD traded to 0.6529 highs yesterday. January 12 lows traded 0.6306. NZD/USD overall trades 0.6260 to 0.6464 and 0.6693.

USD/JPY’s final target at 122.00 holds on a break at 125.00. The overall short only strategy remains as we wait for the 125.00 break. Highs this week at 131.00’s was a bonus free money trade.

For this week, GBP/AUD’s big break for higher prices is found at 1.7675 and current oversold below 1.7540. The strategy is long all week from any price at 1.7400’s to target middle to upper 1.7500’s. Continue the strategy all week.

GBP/AUD eventually broke 1.7675 and traded to 1.7900 highs from 1.7400’s.

GBP/AUD trades deeply overbought and ranges are located from 1.7996 to 1.7678. Good target is found at 1.7804.

EUR/AUD must break 1.5474 for lower prices to 1.5300’s.

JPY Cross pairs hold the same short only strategy.

GBP/CAD January range at 1.6068 – 1.6912. held from 1.6100’s to 1.6600’s. The target at 1.6500’s completed yesterday as the vital low at 1.6100’s also held.

Overall markets trade the same as past weeks to 2 and 300 pip ranges.

Brian Twomey

BOJ History and Current Board, USD/JPY

As a continuation to the April 30, 2017 long article entitled “BOJ Appointments and Implications”, the 2 leading candidates to replace Kuroda in April when his term ends are: Masayoshi Amamiya and Nakoso Hiroshi. Masayoshi term ends March 19 and Kuroda April 8 therefore the announcement to the next BOJ Governor may materialize sooner than expected.

Where both become interesting and unusual is both were born in Tokyo. Only 4 Governors became leaders from Tokyo since the BOJ began in 1882 ot 141 years. The last was Mayekawa 1979 and Yamigiwa 1956.
All past Governors were born south of Tokyo and from southern Prefectures as: Fukuoka 2, Hyogo 3, Oita 5, Kagoshima 3, Yamagata 3. Kuroda is from Fukuoka. Of the 31 past Governors, all were represented by 9 of the total 47 Japan Prefectures and all from southern Japan..

Historically, Japan changed and split by ascension of Emperor Meiji in the 1860’s. Previously, Japan was isolated for 250 years. Emperor Meiji opened Japan not only to the western world but to catapult Japan to a leading economic nation. Meiji was the leader as the Meiji restoration referred to the Emperor as the “Supreme Executive authority” of Japan.

Meiji was not only born in Southern Japan from Kyoyo and the home to all past emperors but the introduction of the Charter of 5 Principles to upgrade schools and education, creation of the Japanese Parliament known as the Diet, government agencies and adopt western ways lifted Japan into the modern day.

Since the Charter of 5 Principles, southern Japan ruled and dominated not only the BOJ and Prime Ministers but northern Japan was satisfied to its 1860’s isolationist and economic positions.

BOJ 2017

The question to stimulus and Yield Control is not elimination to the policy but to Tweak the program. While Kuroda and Prime Minister Abe saw virtues to Yield Control, Shirakawa, Takahide Kiuch and Takehiro Soto dissented in favor of Yield Control adjustment. Soto was replaced by Goshi Kataoka and ally to stimulus and Yield Control. BOJ.

BOJ 2023

The tweak aspect to yield Control and stimulus derived historically from BOJ members from not Southern Japan but from the North and Tokyo and Kanto Prefectures. Naoki Tamura from Kyoto and Adachi Seiji from Fukuroka are southern members and current exceptions to the 9 member board to favor tweaks to Yield Control.

WAKATABE Masazumi from the north at Kanagawa term ends March 19.

From 2012 to 2017, The BOJ votes based on actual Minutes ran consistently 7 -2 to include favorability to Stimulus and Yield Control.

With appointment to Amamiya or Hiroshi to the BOJ, northern Japan will dominate the Board by votes at 6 to 3 southern members and 2 of the 3 members favor adjustment while Nakagawa Junko from the south at Gukuora is questionable.

The Tweak or elimination to stimulus and Yield Control becomes the question to policy moving forward. The adjustment or tweak appears as a done deal but then comes the question to how far to adjustments and will the northern board eliminate Yield Control in favor of wholesale policy changes as the policy is off to yet another BOJ failure.

USD/JPY

USD/JPY big break now falls from 135.00 to 134.81. Vital levels: 129.30, 131.14, 132.98 and 133.89 Vs below 127.47 and 125.26.

Brian Twomey

FX Weekly: DXY and 14 Currency Pair Levels and Targets

DXY traded to 101.99 lows last week. As written every week since the DXY top at 114.00’s in September, DXY not only contains miles of downside but above averages were built into DXY’s price every 100 ish pips to prevent USD and DXY rises. This week is no different as above averages begin at 102.95, 103.29 and 103.80 and travel every 100 pips to 109.00’s.

From DXY’s close at 102.18, next vital points are located 77 pips to 102.95 and 111 pips to 103.29. DXY is on its way to challenge the 50 year average at 96.00’s and 5 year at 95.00 or 500 more downside pips.

Time Vs Distance and Targets

The question to when DXY challenges 96.00’s is a time factor as Time = distance divide by speed. An example was previously calculated for USD/JPY on January 10th at USD/JPY 131.75 and target at 128.81 or 294 pips.

Time = Distance divide speed or Distance = speed X time.
Total 294 pips from 131.75 or 50 pips per day = 6 days,

At 25 pips per day = 12 days,
At 10 pips per day = 30 days

USD/JPY traded 294 pips to 128.81 target in 3 days.

DXY at 50, 25 and 10 pips per day offers 10 days, 20 days and 50 days. The time factor is a basic synopsis to length of time to hold trades to target.

Charts Vs Trades and Targets

As always, past and future trades requires pen, paper and calculator rather than charts, indicators and fibs as charts and indicator tools severely limits profits by late to entries and short sighted targets.

The Week

From DXY downside and limited ability to travel higher, EUR/USD, GBP/USD, NZD and AUD remain married to long only strategies.

EUR/USD

EUR/USD trades a 380 pip range from 1.0486 to 1.0866. A break above 1.0866 targets the range from 1.0866 to 1.1116 and target at 1.0001. EUR/USD from 1.0486 trades deeply overbought and sustained price above 1.0866 begins a new trend higher. The big lines for the week above 1.0866 is located at 1.0917 and 1.0969. Lower targets for the week is found at low 1.0700;s.

USD/JPY trades a current range from 125.36 to 135.12. A break at 125.36 targets 122.00’s and the short term range from 125.36 to 119.34. USD/JPY’s larger range is located from 112.00’s to 135.00’s. USD/JPY trades massive oversold from 135.00’s and overbought from 112.00;s.

JPY Cross Pairs

Overall JPY trade strategy is short only. The problem to JPY cross pairs is leader GBP/JPY as a vital break exists this week at 156.13. Below targets the range from 156.13 to 153.50 then 152.80. Above 156.13 targets the larger range from 161.85 to 156.13.

GBP/JPY corresponds to not oversold or overbought but as a currency pair without direction or purpose. EUR/JPY serves as JPY cross pair leader to replace GBP/JPY due to EUR/JPY’s price to emerge as the exact same to USD/JPY. GBP/JPY becomes the currency to follow EUR/JPY and USD/JPY.
GBP/JPY overall goes short this week from 157.00’s to high 158.00’s.

CAD/JPY trades from 95.29 to 100.63. Below 95.29 targets the range from 95.29 to 91.34 then 90.18 and targets 94.29.

EUR/JPY trades from 141.02 and 141.54 to 135.26. Below 135.26 targets the range from 135.26 to 131.82 and the target at 134.38. EUR/JPY’s larger range trades 129.84 to 141.02 and 141.54. Similar to USD/JPY, 141.00’s trades massive oversold to deeply overbought at 129.00’s.

For the week, we’re short as EUR/JPY is the preferred trade among JPY cross pairs.

AUD/USD trades 0.6784, 0.6967 and 0.7129. The larger range is established from 0.7600’s to 0.6784. From 0.7600’s is oversold from 0.6900’s while 0.6784 is overbought.

GBP/USD no difference from past weeks as the range is located from 1.1988 to 1.2539. GBP/USD at 1.2200’s is dead center at 1.1988 and 1.2531 on a range trade strategy for longs at 1.2100’s and shorts at 1.2300’s.

EUR/NZD’s range is found from 1.6905 to 1.7257 or 1.6905 to 1.6832 and 1.6802. EUR/NZD is clearly the better trade to GBP/NZD..

GBP/AUD Trade

GBP/AUD’s big break for higher prices is found at 1.7675 and current oversold below 1.7540. The strategy is long all week from any price at 1.7400’s to target middle to upper 1.7500’s. Continue the strategy all week.

EUR/AUD break for lower at 1.5459 targets 1.5300’s on a short only strategy.

EUR/CAD Vs GBP/CAD

Lower for EUR/CAD must break 1.4496, 1.4488 and 1.4477 to target the range from 1.4257 to 1.4477. EUR/CAD’s 10 and 5 year average at 1.4585 and 1.4788 is just ahead of the current price at 1.4502 .
GBP/CAD ranges from 1.6448 to 1.6787 or 1.6448 to 1.6101. Nothing special to GBP/CAD except a long only strategy to target 1.6567 and the break at 1.6448.

USD/CAD next break lower is located at 1.3142 to target 1.3117. Any price at 1.3400’s is open to shorts to first target at 1.3283 then 1.3240.

NZD/USD from the close at 0.6380 trades overbought inside the range from 0.6242 to 0.6458. Above 0.6458 targets 0.6574 and the new range at 0.6458 to 0.6629.

Brian Twomey