Weekly Trades: USD/JPY, AUD/JPY, GBP/CHF, GBP/NZD, GBP/ZAR

This week’s trades are random choices as follows: USD/JPY, AUD/JPY, GBP/CHF GBP/NZD and GBP/ZAR.

EUR/CAD achieved 1.4500’s target, EUR/USD achieved 1.0946 target, CHF/JPY achieved 112.04 target from 114.09,

USD/SEK achieved target for 515 pips. EUR/JPY achieved target. Wide rangers had problems but we earn it back this week.

Oct 2019 post for S& P’s as stated short strategy only and here’s posted targets

2955.71, 2904.21, 2869.13, 2813.70, 2742.65, 2681.77, 2646.07.

Only 1 long term forecast is required and is generally good for nearly 1 year until targets complete.

Stock indices are currencies by a different name.

USD/JPY from the 108.06 close is oversold yet faces many hurdles to rise from 109.56, 109.84 and 109.89 therefore the USD/JPY trade must be viewed as 2 trades.

USD/JPY

Long 107.98 and 107.78 to target 109.26. Long above 109.56 to target 110.73. Must cross vital 109.89 and 110.34.

GBP/CHF

Long 1.2364 to target 1.2697. Must cross 1.2417, 1.2487 and 1.2577.

Long above 1.2617 to target 1.2697. Must cross 1.2657.

AUD/JPY

Long anywhere or 70.15 to target 73.20. Must cross 70.83, 72.19 and 72.87.

Long above 73.56 to target 74.22. Must cross 73.89.

GBP/NZD

Short 2.0588 and 2.0625 to target 2.0177. Must cross 2.0476, 2.0254 and 2.0180.

Short below 2.0103 to target 1.9954. Must cross 2.0029 and 1.9955.

GBP/ZAR.

GBP/ZAR trades at first ever 60 year highs at 20.0000’s and is deeply overbought. 1 year correlations to GBP/USD currently run +75% and -68% over 3 years.

Short 20.0887 and 2.1122 to target 19.6170.

 

Brian Twomey

NZD Forecasts NZD

NZD/USD and NZD cross pairs are a divergent set of currency pairs among EUR, GBP, AUD and JPY counterparts and operates / trades on its own terms within its own universe. The main pairs NZD/USD, NZD/CHF and NZD/JPY trade and are permanently contained between NZD/CAD at the top and NZD/EUR at the bottom as follows using 2 week old closing prices:

NZD/AUD 0.9597
NZD/CAD 0.8533
NZD/JPY 0.7058
NZD/USD 0.6430
NZD/CHF 0.6327
NZD/EUR 0.6941
NZD/GBP 0.4937.

The arrangement is the exact same agreement as GBP/USD and cross pairs as exchange rates trade within their own separate universe although NZD/USD and NZD/CHF forever remain in contention against each other as it pertains to exchange rates predict exchange rates.

The NZD composition is the exact same as AUD yet much different from EUR and GBP and due to the position of EUR/CAD and GBP/CAD and CAD positions.

While AUD/CAD and NZD/CAD serve as tops in the AUD and NZD universe, GBP/CAD and EUR/CAD are positioned as neutral currencies within the GBP and EUR complex. Above GBP/CAD and EUR/CAD as next currencies are wide rangers EUR/NZD and EUR/AUD Vs GBP/NZD and GBP/AUD.

To demonstrate by GBP example and to highlight CAD’s, position,  NZD/ISD and NZD/CHF off kilter neutrality Here’s GBP line up and the GBP set up is the eact same as EUR.

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

 

GBP/CHF, EUR/CHF and AUD/CHF are bottom currencies and always wider range movements by design to GBP/USD, EUR/USD and AUD/USD. The purpose of GBP/CHF, EUR/CHF and AUD/CHF is to contain on purpose movements to GBP/USD, EUR/USD and AUD/USD as ranges by design are much shorter than its CHF counterparts. CHF wide ranges also ensures counterpart currencies maintain their respective trading space but also never to trade to zero. CHF is the currency market protection currency.

GBP/CHF, EUR/CHF and AUD/CHF also serve as bottom protectors to the overall GBP, EUR and AUD universe as GBP/USD, EUR/USD and AUD/USD can’t ever trade below CHF counterparts. As GBP/USD rises or falls so then does GBP/CHF and as GBP/CHF rises or falls so then does GBP/USD.

GBP/USD, EUR/USD and AUD/USD then become neutral currency pairs by design within the overall universe yet locked between CHF and JPY counterparts and movements are contained between 2 wide range currency pairs, CHF and JPY.

What separates NZD/USD and NZD/CHF from its GBP, EUR and AUD counterparts is both are allowed an equal chance as bottom currency positions because allowable movements are always equal or close to equal. Bottom currency difference is either pair may serve as neutrality and second divergence is which pair as bottom factors a distinction to forecast NZD pairs as exchange rates predict exchange rates.

NZD currencies are bottoms and smallest currencies to well over 60+ currency pairs therefore NZD overbought / oversold becomes a signal currency to higher exchange rate pairs.

What overall neutrality means and why for GBP/USD, EUR/USD, AUD/USD and NZD/USD is reciprocal currencies as USD/GBP, USD/EUR, USD/AUD and USD/NZD contain wider ranges than counterparts. This wide range scenario forces not only neutrality but ensures trading spaces won’t violate. For NZDUSD lower ranges ensures NZD/USD is allowed movements to a certain point then it stops the rise or fall.

Exchange rates predict exchange rates applies to which currency pairs to factor against each other to determine in weekly trades exact tops, bottoms, entries and exits. Its the perfect trade as it derives from exact exchange rates however every currency pair is different to the result and procedures to forecast tops, bottoms, exits and entries. To apply the concept is not only simple but takes literally minutes to obtain an accurate forecast.

While NZD/CAD and AUD/CAD serves as tops to NZD/USD and AUD/USD, GBP/CAD and EUR/CAD are neutral pairs and positioned as middle currencies to separate the distribution from low range movements to higher range pairs. Middle and neutral currency pairs are designed not to move as widely as counterparts as the name of the game is containment. Currency prices are designed not to move widely.

Above EUR/CAD and GBP/CAD are higher range pairs EUR/AUD and GBP/AUD Vs EUR/NZD and GBP/NZD.

How the distributions align determines high or low movements. Many instances, 1 or 2 currencies within the universe are identified as problem pairs as prices maybe to high or low. Problem pairs disrupts overall price movements to counterpart pairs. EUR is a classic example to problem pairs and prices. The last time all GBP currencies traded perfectly was last February during most volatile trading against Brexit news. Prices traded smoothly and normally.

Perfect alignments to exchange rates are questions to Correlations and ranges. Explains problem pairs Vs uniform price movements.

Last week’s trading experienced uneven prices among currency pairs to inform problem pairs and non normality existed. NZD is a classic normally traded distribution and rarely are problem pairs existent.

NZD serves its purpose in the Currency pair line up by establishing daily interest rates for the remainder of the world’s central banks and currencies. And NZD obtains its interest rates from the Fed. Its a 24 hour system and completes everyday from the Fed to RBNZ then distributes to the world’s central banks. The Fed and interest rates set the world standard while NZD and the RBNZ carry on the daily interest and exchange rate conventions since the 1972 free float.

NZD as exchange rates predict exchange rates forecasts NZD/JPY the most at 11 times, NZD/CHF at 6 times, NZD/USD at 4 times and NZD/CAD 9 times. Best and most accurate forecasts are clearly NZD/JPY.

The purpose for NZD/AUD is a prediction currency to forecast bottoms in NZD/JPY, NZD/CHF and NZD/USD. NZD/GBP serves no real function as a forecast currency nor to forecast from NZD as the distance is to far to all NZD pairs.

Subtract the perfection seen in NZD/JPY, the vast majority of NZD pairs forecasts exact and solid tops and bottoms. And the majority to the NZD universe consist of the main 3 as NZD/CHF, NZD/USD and NZD/JPY.

Only target trading is located in NZD/JPY while remainder NZD pairs lack ability as exchange rates to forecast targets. The best is forecasts to tops and bottoms which may serve as boundaries rather than targets. The overall message to NZD is a range rather than a trend currency. A trend currency such as EUR and GBP easily forecasts targets as well as tops and bottoms.

here’s how NZD operates:

NZD/USD predicts NZD/JPY tops and bottoms.

NZD/JPY predicts NZD/CHF and NZD/JPY bottoms.

NZD/CHF predicts NZD/JPY shorts.

NZD/CAD predicts NZD/CHF NZD/CHF top and NZD/JPY bottom.

NZD/AUD predicts NZD/USD top and NZD/CHF bottom.

NZD/EUR predicts NZD/JPY tops and bottoms.

Reciprocals

NZD/CHF predicts NZD/JPY tops.

NZD/USD predicts NZD/JPY top.

NZD/CAD predicts NZD/USD and NZD/CHF bottoms.

NZD/AUD predicts bottoms to NZD/JPY, NZD/USD and NZD/CHF.

NZD/JPY predicts NZD/USD and NZD/CHF tops.

 

Brian Twomey

11 Weekly Trades: EUR, CHF/JPY, EUR/AUD, GBP/NZD, NOK, SEK, GBP/ZAR, GBP/NZD, GBP/AUD, EUR/JPY, USD/CHF

This week’s trades are again based on solicitation from traders and I agreed to post the 11 currency pairs as follows: CHF/JPY, GBP/NZD, GBP/AUD, GBP/ZAR, USD/NOK, USD/SEK, USD/CHF, EUR/USD, EUR/JPY, EUR/AUD, EUR/NZD.

Normally, EUR/USD lacks trade consideration due to the ECB’s new STR interest rate introduced last October and result to 100 pip EUR weekly ranges. Same status to 50 and 100 pip weekly movements for USD/CHF but USD/CHF overall remains its normal dead range currency. USD/CHF should and eventually will trade a 1.000 handle.

USD/NOK, USD/SEK and GBP/ZAR contain miles upon miles of downside as all trade at the top of a 20 year range and all medium to long term are far, far overbought. Sell strategies is the way for many months in the future until at least 2000 pip targets achieve destination. USD/NOK at 9.0000’s should trade an 8.000 exchange rate, lower 9.0000’s for USD/SEK and GBP/ZAR from 19.0000’s should trade to 18.0000’s.

Good weekly trade choice for CHF/JPY as it begins the week in deep overbought against a 200 pip downside target. CHF/JPY is the exact same pair as USD/JPY which means its a USD currency. USD/JPY is massively overbought and complies to overbought CHF/JPY.

For EUR/JPY nothing special this week and this applies to all JPY cross pairs although GBP/JPY is a special currency pair in its own category within the JPY cross pair lineup. Lower this week for USD/JPY, CHF/JPY and JPY cross pairs.

EUR/AUD and GBP/AUD overall contains much downside not only from GBP but against deeply oversold AUD. Higher AUD will assist EUR/AUD and GBP/AUD downside. EUR/AUD however has been and may always remain a sell strategy as 1.5900 target awaits.

EUR/NZD was in full compliance mode to last week’s 300 pips and straight up. EUR/NZD forced higher in GBP/NZD as deep divergence was seen. This week, both are in compliance.

EUR/USD

EUR/USD prices will again trade normally.

Long 1.0841 and 1.0828 to target 1.0946.

Must cross 1.0867, 1.0892, 1.0917 and 1.0942. Long above 1.0971 to target 1.1073. Must cross 1.0996, 1.1021, 1.1046 and 1.1071.

USD/CHF.

Long 0.9743 and 0.9724 to target 0.9781. Must cross 0.9762. Long above 0.9801 to target 0.9876. Must cross 0.9838.

EUR/JPY

Short 12.21 and 120.99 to target 120.24. Must cross 120.89, 120.78, 120.67.

Short below 120.14 to target 119.26.

CHF/JPY

Short 114.28 to target 112.04. Must cross 113.71, 113.42, 113.13, 112.88, 112.59.

GBP/AUD

Short 1.9585 and 1.9626 to target 1.9199. Must cross 1.9544, 1.9503, 1.9442.

GBP/NZD

Short 2.0401 and 2.0433 to target 2.0045. Must cross 2.0369, 2.0305, 2.0272.

Short below 2.0013 to target 1.9884. Must cross 1.9981, 1.9949 and 1.9917.

EUR/AUD

Short 1.6383 and 1.6361 to target 1.6240. Must cross 1.6361, 1.6339,1.6273 and 1.6251.

Short below 1.6229 to target 1.6185. Must cross 1.6225 and 1.6207 .

EUR/NZD

Short 1.7112 and 1.7136 to target 1.7018. Must cross 1.7089, 1.7066, 1.7043.

Short below 1.6995 to target 1.6807. Must cross 1.6972, 1.6949.

USD/NOK

USD/NOK is a much better trade than USD/SEK.

Short 9.3162 and 9.3446 to target 9.2033. Must cross 9.2593. longer term target 8.4047 on a break at 9.1460, 9.0306. short entry just ahead of 1.3732.

USD/SEK

Short 9.7315 and 9.7405 to target 9.6594. Must cross 9.7135, 9.6955 and 9.6775. Longer term target 9.0188 on a break of 9.6414 then 9.5047, 9.2345 and 9.0966.

GBP/ZAR

Short 19.4643 and 19.4833 to target 19.2580. Must cross 19.4456, 19.4269, 19.4082 and 19.3331.

 

Brian Twomey

EUR/CAD: Break Even Trade and No Losses

The weekly trade was long 1.4357 to target 1.4500’s. A good valid weekly trade as usual. However, EUR/CAD traded to lows at 1.4262 and off entry by 90 pips.

I cannot state this point enough, an entry miss is a bonus to profits. Normal traded markets never experiences an entry nor target miss. But now and then in our weekly trades, an entry miss is seen.

But an entry miss only affects 1 or maybe 2 currency pairs and extremely rare to see entry misses on multiple currency pairs. For example, USD/CAD might experience an entry miss. This means CAD/JPY will miss entry as well. Possibly, all GBP or all EUR might witness an entry miss

The only manner to see en entry miss is a price trades from oversold to more oversold or an overbought price rises to more overbought. This week and 2 weeks ago, all prices are trading lower on oversold and higher on overbought. Signifies an ailing market overall as prices lack symmetry from currency pair to currency pair.

GBP/NZD is a good example. this week as entry 2.0304 was surpassed 3 times. Rare to see 2 times for the same trade entry. Overbought 2.0304 went to more overbought 3 times.

Never a problem as strategy is add 1 lot to a missed entry and never think twice as this decision should be automatic. The target is never in question but in GBP/NZD;s case, entry was the problem.

Example to missed entry and break even trade.

Add 1 lot at lows 1.4262 and so far traded highs was 1.4338. Add 1 lot result was +76 pips so far. EUR/CAD will eventually trade to original entry at 1.4357. Good choice to exit the first lot at break even and now we run at least a 76 pip profit on the second lot.

The second choice to the trade is hold both lots to the 1.4500’s target. But that is an individual decision to holding periods. Most traders want the weekly trades then to exit by Friday so then a new trade is issued every Saturday.

The lesson here is not only how to trade to break even on a missed entry and how to profit from a second lot but most importantly, currency and all financial instrument trading never experiences losses. Hard concept to grasp for the majority but if the price context is fully understood then losses are impossible. Many traders that trade with me for many moons fully achieved understanding to this concept and all know exactly what to do on missed entry, break even, profit trades and never a loss.

And note to the trade, 3 numbers for entry and target. Nothing more is required. Not a stop, chart, graph, Conovirus or the latest market talk or economics. A market price doesn’t care about such things as it only knows entry and target and the price always complies.

 

Brian Twomey

 

 

 

Realignment: EUR/USD, USD/JPY and JPY Cross Pairs

EUR/USD, AUD/USD, NZD/USD and GBP/USD all trade not only in deep oversold territory and further dropping but all currency pairs lost control to proper attachments to its JPY cross pairs. EUR, AUD, GBP and NZD broke below vital break points to allow the drops to oversold but JPY cross pairs failed to follow.

EUR/USD for example trades below 1.0982 Vs EUR/JPY above at 120.06.

AUD/USD trades below from 0.6769 while AUD/JPY trades above at 74.00

NZD/USD trades below from 0.6465 while NZD/JPY trades above at 70.68.

The ultimate story is GBP/USD trades below 1.2925 and GBP/JPY far above at 141.33

The opposite side is severely overbought USD pairs beginning with USD/JPY from vital 109.32 trades above, USD/CAD at 1.3215 trades above and USD/CHF at 0.9797 trades above.

USD/CHF above at 0.9797 also reveals correctly CHF/JPY above at 111.61.

The wild card pairs are always USD/CAD trades above yet on the brink and CAD/JPY correctly trades above.
Overall USD/JPY and all JPY cross pairs trade above respective high / low break points while all Non USD pairs trade below.

USD/JPY above vital high/ low point and all JPY cross pairs trading above vital points not only explains why EUR and non USD pairs continue drops into oversold but also explains current far deviations in USD Vs Non USD pairs. A deeper explanation to present currency markets is a Realignment.

As an example, most widely traded EUR/USD, EUR/JPY and USD/JPY.

Currently USD/JPY owns EUR/JPY and EUR/USD is odd ball currency kicked to the curb. Most stunning and rare to the synopsis to realignment is GBP/USD, GBP/JPY and USD/JPY.

USD/JPY now owns GBP/JPY and GBP/USD is also left on its own. GBP/JPY is a highly special currency pair and rarely loses its attachment to GBP/USD. For GBP/USD to lose its association to GBP/JPY is a massive development.

Typical and correct currency pair arrangements in currency markets are AUD/USD owns AUD/JPY, NZD/USD owns NZD/JPY, EUR/USD owns EUR/JPY, GBP/USD owns GBP/JPY. In this development, USD/JPY is left on its own. Normal trading then means for example, AUD/USD and AUD/JPY are the same trade as AUD V AUD, long or short as a double trade.

Mathematically, the word “own” means a massive Correlational shift. Correct is EUR/USD and EUR/JPY as rightful owners by EUR V EUR and strong Correlations while USD/JPY as odd currency contains no correlational association to EUR/USD or EUR/JPY.

In current Realignment, the reverse now holds which means USD/JPY and JPY cross pairs are now the double trade to long or short. But it also means USD/JPY as new owners to JPY cross pairs holds a strong Correlational association to JPY cross pairs and no association to EUR/USD.

To define a Realignment, its a Correlation shift or transfer from either negative to positive or positive to negative, depending which currency pair is affected. Correlation is a commentary and derivation on a Standard Deviation which is the overall glue that holds currency prices and currency markets together by defining movements.

The last 2 major Realignments occurred from 1998 to 2008 and from 2008 to present. Generally, major Realignments last roughly 8- 10 years. Within the 10 year framework, mini Realignments occur to last anywhere from 2 to 3 years. How strong and lasting are major Realignments requires a view to at least 10 years of Regression Statistical moving average data from EUR/USD, EUR/JPY and USD/JPY.

Seen from the data to include Correlations however are longer term trades to last for mutli years as the data sees the future over many years. Year 2007 was clearly evident to the impending 2008 crash and the massive Correlations shift as the Correlations from USD/JPY and EUR/USD revealed a top.

By defining movements addresses predominantly ranges. Residual Plots define multi year boundaries and ranges compress when USD/JPY owns JPY cross pairs and expands when EUR/USD for example owns EUR/JPY. Same principle for AUD/USD VS AUD/JPY, GBP/USD V GBP/JPY. Its a USD Vs Non USD move as USD volatility is quite low when USD is the dominant feature to currency markets and contracts when in its descent.

The derivatin to current Realignment by speculation derives from DXY at 99.00’s as the 5 year average is located at about 95 to 96.00. DXY naturally allowed USD/JPY to trade hgher, non USD to trade lower and JPY cross pairs to attach to USD/JPY. Then JPY cross pairs transforms to trading exactly the same as USD which means they are now USD pairs rather than non USD pairs when attached to for example EUR/USD and EUR/JPY.

For USD/JPY watch 112.03 at the 5 year average, EUR/JPY at 123.21, GBP/JPY 147, CHF/JPY 114.14 and CAD/JPY at 85.77.
Under Realignment, USD/JPY, USD/CHF and JPY cross pairs higher while Non USD pairs much lower. If my speculation is correct then markets could very well be under at least a 2 -3 year Realignment.

Interested students of the markets are invited to read my 2015 academic paper when EUR/USD, EUR/JPY and USD/JPY were analyzed by 10,000 exchange rate data from 1998 to 2008 and 2008 to 2015.

 

Brian Twomey

Weekly Trade Count

 

Here’s my counts

 

GBP/CAD

Monday 1.7309 highs to Tuesday lows 1.7214. Questionable to take profits here when targets failed to achieve and did we know GBP pairs would skyrocket higher. GBP does this from time to time on an entry then decides to rocket higher. And at the same time when exact entry wasn’t seen.

Then Tuesday 1.7303 highs to Wednesday, today, 1.7133 target. The sell Point was 1.7315 and 1.7341.

Same story with GBP/NZD. Achieved 116 pips on shorts then traded past 2.0304 weekly entry. And did we know GBP would trade higher, no.

But Monday’s 2.0290 was close enough to 2.0304 for entry. The final highs were 2.0400 and passed entry. That’s wonderful.

Let;s assume no short entry at 2.0290 but entered at 2.0304 and add 1 lot at 2.0400. Lows achieved 2.0236. From 2.0400 then 164 pips and 2.0304 is 68.

GBP/NZD target remains far away at 1.9900’s. Should we even take profits and count above pips.

My advice for most traders is get the money 1st and target die to distance, second.

 

Not sure GBP/AUD is under question at 1.9515 from 1.9480

 

EUR/CAD runs a loss about 100 pips

 

Most don’t bother with GBP/ZAR nor NOK and other currencies outside our regular 28

 

Brian Twomey

 

 

 

Weekly Trade Results: GBP/NZD, GBP/CAD, GBP/AUD, EUR/CAD, GBP/ZAR

Trades this week were based on trader requests. GBP pairs worked on 2 rounds of shorts. This happens at times especially when we see entry hit on Monday or Tuesday. To respectfully restate for new viewers, the job of the trader is enter and exit at target. This is done Sundays. Never a need to watch screens all week as trades are perfect. We don’t use charts, graphs, stops, indicators. I use math but math formulas that work as many don’t. Peruse the site and my words are backed by performance over 16 years.

Target is never in question as targets are written in math formulas. On occasion we miss an entry but never far from the original weekly entry. Add a lot and continue with the trade to target as a missed entry is free money bonus points.

Open trades as this week all posted on Linked IN, twitter and Fxstreet.

 

GBPNZD Short 2.0276 and 2.0304 to target 1.9991
Results: 2.0291 – 2.0175 + 116 pips
Then rise 2.0400 to 2.0243. Add 2.0400, Lows 2.0243 +157 Pips from 2.0400 and +61 from 2.0304. Total +334 pips.
GBPAUD Short 1.9441 and 1.9480 to target 1.9117
Results 1.9515, Lows 1.9351, Trade runs +164 pips.
GBPCAD. Short 1.7315 and 1.7341 to target 1.7133
Results 1.7291 to 1.7199, +92 Pips. Then 1.7304 to 1.7165 lows. Trade runs +139 pips.
EURCAD Long 1.4357 and 1.4342 to target 1.4534
Results Lows 1.4290, missed entry, add Lot, hold to target or week end profit
GBP/ZAR short 19.4716 and 19.4886 to target 19.0636.
Results. Horrible Trade Highs 19.6521, add lot, Lows 19.3771.
From 19.4886, +1115 pips, From 19.6521, +2750 Pips. Total 3865 Pips.
Last week’s GBP/ZAR was miss 600 ish pip entry but trade far surpassed target. GBP/ZAR is a 5000 per week movement. Wild currency.
              Brian Twomey