Yesterday’s analysis to EUR/USD drops despite massively oversold is also viewed from EUR opposite USD/JPY. At 110.00’s and 111.00’s, USD/JPY is rising against a deeply overbought currency price. EUR/USD shorts are not only impossible but USD/JPY longs are also impossible.
Due to present conditions to drop in oversold and rise in overbought, the best strategy is refrain from trading EUR/USD and USD/JPY.
Viewed from DXY at 93.00’s, a massive top is approaching at 95.00’s and 150 pips away from current price. Current DXY range 92.78 to 94.39. This means next hurdle exist at 93.58 and note the sell off from 93.47.
Massive overbought USD/JPY led to significant tops and equally overbought to JPY cross pairs. GBP/JPY shorts is the best short pair. The strategy is short everyday until at least 148.00’s trades from current 152.00’s. Traders have 400 pips of shorts at +70 and +80 pips per day.
10 year yield range 1.8448 to 1.3305 or 51 points. Above 1.8448 targets 1.9819 and a wider range at 1371 points. Below 1.3305 targets 0.805 or another 52 point range.
Don’t waste your time on any yield story cause its meaningless fluff added to more meaningless words to explain a market price that is unexplainable especially when yields moved 1 or 2 points and within range. From 0.805, the 10 year is deeply overbought otherwise the current price trades normal inside its ranges or not overbought nor oversold.
AUD/USD broke its vital line at 0.7624 and targets 0.7589, 0.7561 and 0.7504. The strength to all AUD/USD up and downtrends must be measured by EUR/AUD. Current EUR/AUD at 1.5422 trades below its vital break at 1.5653 and AUD/EUR at 0.6392 or 1.5644.
A break higher in EUR/AUD means a break lower to AUD/EUR and then AUD/USD contains assistance and much strength to its downtrend. A further break to AUD/EUR would assist AUD/USD to much lower prices than 0.7504. AUD/USD would target 0.7400’s easily. AUD/USD break at current 0.7617 b is just a short trade with targets rather than a significant and lasting move lower.
Current EUR/AUD at 1.5422 is oversold and heading higher, means short AUD/USD as it travels lower.
New week and the same divergence exists between the big 4 currencies NZD/USD and EUR/USD Vs AUD/USD and GBP/USD. EUR/USD and NZD/USD broke required lines to head lower at 1.1944 and NZD/USD 0.7116. EUR/USD traded 212 pips lower to 1.1732 and NZD/USD 175 pips lower to 0.6941.
The problem is NZD/USD and EUR/USD not only traded lower but to massively oversold levels. Its impossible for NZD/USD and EUR/USD shorts. Regardless if both drop a few more pips. Shorts are impossible unless at higher levels. But to profit from a few pips is a meaningless trade. Better and easier trades exists to profit far more.
EUR/USD and NZD/USD broke ahead of AUD/USD and GBP/USD and created a divergence among the big 4. AUD/USD must break 0.7621 to target lower levels and GBP/USD 1.3682. GBP/USD prices are falling while the MA at 1.3682 is rising. Encouraging to the impending 1.3682 break. Once GBP/USD and AUD/USD breaks lower then uniformity exists to the 4 pairs for longs and shorts.
GBP/USD problem to today’s day trade is the central banks offered the exact same trade today as the Asia open. From 9 pm last evening, GBP/USD will trade the exact same targets and levels until 10 am this morning. That’s 11 hours for the same trade. Its dirty pool but this happens now and then. Yet few will know nor understand such concepts as charts and indicators won’t capture such vital information.
Normal to day trades is once an exchange rate trades, its taken out of the market and no longer exists as a meaningful level. Its totally excluded for the purview and this includes the full parameters to the day trade as: targets, levels, tops, bottoms and supports and resistance. New central bank information is required for a new day trade.
And this includes our 24 hour trades as presented a gazillion times.
GBP/USD same trade means the exact same support and resistance points without change. For today, 1.3706 and 1.3726 Vs 1.3796 and 1.3831.
GBP/USD for the first day trade to begin last evening at 9:30 pm EST to 2:30 am, the range traded 1.3782 highs to 1.3747 lows or 35 pips in 5 hours.
GBP/USD traded its best hour at 2 am and ranged from 1.3777 to 1.3747 or 30 pips.
New day trade time to begin at 2:30 am, GBP/USD traded 1.3741 lows to 1.3779 highs or 38 pips. Today’s trade, we want long 1.3693 and 1.3711 to target the break at 1.,3626 to 1.3744. We want shorts at 1.3822 and 1.3813 to target 1.3770.
GBP/USD Weekly Trade
Short 1.3993 and 1.4007 to target 1.3774 then Short below 1.3715 to target 1.3598. May not see this trade however that’s why we trade 18 pairs per week. Brian Twomey subscribers are the smartest and most profitable FX traders on the planet.
Week 8 to overbought JPY cross pairs, NZD/JPY dropped 300 pips and GBP/JPY fell 237 pips last week. As written over last weeks, JPY cross pairs contain downside targets from 200 to 400 pips. Next to fall 200 and 400 pips are GBP/JPY and CAD/JPY. For GBP/JPY actually contains a 144.00 target. Patience as GBP/JPY must cross below 148.47 then 146.70.
Assist to short only trade strategies for JPY cross pairs are overbought USD/JPY, oversold USD/CAD and GBP/USD stuck in a 100 pip range. GBP/USD longer term target remains 1.3500’s. GBP/JPY closes over the past 4 weeks: 151.08, 150.87, 151.66 and 149.86. GBP/JPY hasn’t moved except to higher overbought degrees.
EUR/USD and NZD/USD begins the week oversold, GBP/NZD must break 1.9555 to head lower while no interest exists to trade EUR/NZD.
AUD/USD ranges are wide this week while EUR/AUD begins oversold to neutral. GBP/AUD sits between familiar territory at 1.8131 to 1.7945.
DXY as reported weeks ago from 89.95 lows, DXY at 92.71 trades 91.43 to 92.78. A break above 92.78 then DXY ranges from 92.78 to 94.39. DXY 95.00’s are many and massive.
Overall currency market prices are building to 300 pips targets.
USD Vs EM
USD Vs EM begins the week massively overbought. Easy money for short trades.
USD/PLN begins massive overbought from 3.9300’s and targets 3.8800’s easily.
USD/BRL targets 5.6056 from its close at 5.7574. Watch USD/CZK 21.95 USD/DKK targets 6.2694
USD/HUF begins the week fairly neutral and targets 305 from 307. USD/MXN Watch 20.65
USD/MYR targets 4.1283 from 4.1465 USD/RON targets 4.1164 from 4.1413.
USD/TRY targets 7.8026 from 8.1400 USD/ZAR Watch 15.1049.
By the written hand as is my usual and written years ago. Fibonacci deals with not only percentages but Square Roots of 5. Its a complicated system, doesn’t work and leaves many pips on the table because the vast majority of prices remain at or near 50%. Can’t touch a 50% price.
Fibonacci was 12th century onwards and he had his day of prominence. Then Gauss came along in the 18 century with his bell curve and Statistics and blew the doors off Fibonacci. Statistics applies directly to numbers and is more exact than Fibonacci.
Not totally discrediting Fibonacci but one must truly know what they are doing. Statistics is much easier to calculate and earn many more points and pips. Remember. Its not what is earned but how many pips went by without profit.
10 Year Yield 1.65 2 Year Yield 0.13 Fed Funds Rate 0.07
Fed Funds should actually trade between Inflation and GDP. As Inflation drops then higher goes GDP and Fed Funds. Fed Funds maintains artificially low levels due to multi year stimulus. Since 2014, Inflation traded higher than GDP and Fed Funds. In the 1970’s, this was called stagflation to mean prices traded higher than productivity output.
Wages Vs Productivity is a good measure however more detailed is divide Total Labor Income by GDP to derive a Unit Labor Cost figure. The operable word is Cost as the measure to produce GDP output answers the question: are Wages to high, low or just right. From 2007 to 2011, Unit Labor Costs were negative 0.7, dipped to minus 9.1 in 2009 and 2010 then positive 0.6 in 2010 to 2011.
In Q1 1974, Unit Labor Costs hit 70 year highs at 12.7. Current Unit labor Costs in the Non Farm sector runs +6% for Q4 and Output is running 5.5%. While Hourly Compensation runs +1.5%, Output per hour is down 4.2%. A bit slack.
Manufacturing Unit Labor Costs run -8.8%, Output runs +13%. While Hourly Compensation is down -4.2%, Output per hour runs +5%. Not bad for manufacturing.
Inflation is the overall driver to the Economic system however GBP must trade above Inflation and maintain the relationship.
Stimulus over the past 10 and 12 years brought GDP and Inflation and the overall economic system down to its lowest depths. And no end in sight. Powell’s first ever words to Monetary Policy as to rescind stimulus focuses on economic recovery and higher interest rates. Stimulus money and Interest rates share an adverse relationship.
GBP/CAD rose 88 pips yesterday from 1.7250 at the time of writing. The big High/ Low break is located at 1.7369.
EUR/USD and NZD/USD continues to trade lower against deeply oversold. Next for EUR/USD is 1.1794 and 0.6951 for NZD/USD.
GBP/USD 1.3691 must break to target lower and 0.7631 for AUD/USD.
GBP/CAD opened the week at 1.7324 rose to 1.7373 then dropped to weekly lows at 1.7178. From the close to 1.7178, GBP/CAD dropped 146 pips.
To achieve the 146 pips without doing a dam thing, short 1.7373 was the only requirement as the major break point Sunday was located at 1.7400. The point now, 4 days later is located at 1.7372.
GBP/CAD at 1.7246 is at extreme oversold. Extreme oversold means price is going higher, up, above, greater than. Next extreme is located at 1.7204. A serious reversal is required before any consideration to lower levels.
Next points higher are located 1.7288, 1.7330, and 1.7351. Above 1.7372 targets easily 1.7479 then short 1.7479 to target 1.7414.
Shorts are impossible unless the trader is a gambler, incompetent, uses faulty trade systems, doesn’t give a dam to his audience or respect for readers.
Above is 1 of gazillions of trade mistakes posted and result to losses. Nothing new for this contributor as losses are seen often. The state of trading and websites are beyond crisis mode. Today, its extreme emergency.
Banks are just as guilty to recommended losses as they turned retail trader and also don’t give a dam. They report moving averages that don’t exist nor contributes to analysis.
Either the websites must close or seriously rehabilitate the contributor list because readers are losing and not many left to loose anymore. Fxstreet was the greatest of great websites. Best trades, analysis, education and all types of new to pro traders read fxstreet. The pros left long ago and nobody is left to read deficient analysis anymore.
Among the big 4 currency pairs, uniformity exists with formal breaks at EUR/USD 1.1957, GBP/USD 1.3693, AUD/USD 0.7637 and NZD/USD 0.7093.
We’re watching USD/CAD for 1.2689 and a break higher and EUR/AUD 1.5665 for AUD/USD much lower. AUD/USD traditionally requires the assistance to AUD/EUR to move significantly.
NZD/USD and EUR/USD remain deeply oversold particularly at NZD extremes 0.6934 and EUR/USD 1.1811. Both NZD and EUR moved far ahead of AUD and GBP and now must consolidate to allow GBP/USD and AUD/USD to trade lower.
Next break for AUD/USD is located at 0.7574 then 0.7510. GBP/USD must break 1.3640 then a brand new downtrend begins. USD/CAD must break 1.2600, 1.2645 then 1.2689 and a brand new uptrend begins.
The table below highlights how market expectations of an interest rate decrease at the next RBA Board meeting has evolved in recent days.
Trading Day No Change Decrease to 0.00% 16 March 13% 87% 17 March 13% 87% 18 March 13% 87% 19 March 13% 87% 22 March 13% 87% 23 March 13% 87% 24 March13% 87% 25 March13% 87%
The above data is a lie. The 30 day Bank bill informs at the April 6 RBA meeting, OCR contains an 87% chance to lower to 0.
The 30 day Bank bill since November traded 0.01 and 0.02. If trading days were taken back to November, the data would still reveal 87 nd 86%. its a lie. Prices haven’t moved enough to fully evaluate a chance for anything.
Meanwhile, the RBA stated no intention to go negative rates. Take OCR down from 0.10 then rates go to negative. No better evaluation than my 5 day Rule for the 90 day rate.
Keep it simple as this stuff is not complicated nor is it as complicated as most highlight. Currency analysts in this regard are most crooked but they don’t understand what they say or do and it is plainly obvious from their own words.
WM Reuters NZ Dollar Fixing Report for 24 Mar 2021 2pm Fix
The Official Cash Rate (OCR) compound index simplifies the calculation of compound interest rates providing a standardised basis that is published by a recognised benchmark administrator.
The OCR compound index is equivalent to a series of daily data representing the returns from a rolling unit of investment earning compound interest each day at the OCR.
The change in the OCR Compound Index between any two dates can be used to calculate the interest rate payable over that period. The interest rate payable over that period would be realised New Zealand Overnight Index Average (NZONIA) which is a term risk free rate. Realised NZONIA is a backward looking rate based on the OCR, compounded daily in arrears over the relevant period
In the New Zealand context, the New Zealand Financial Markets Association (NZFMA), the Benchmark Administrator of New Zealand’s interest rate benchmarks, continues to favour a multiple rate approach, similar to Australia, by retaining BKBM and implementing robust risk free benchmarks in line with international developments.
As a result, the NZFMA has developed the OCR Compound Index and will calculate and publish the index each business day, via email, at 10.41am.
OCR Compound Index calculation methodology and conventions Component Detail Data input
The Reserve Bank of New Zealand Official Cash Rate as published on Refinitiv page RBNZ02 and Bloomberg page each business day at 9.00am.
The rate is applicable to the current business day (T+0). The index will have a base of 100 as at 17 March 1999.
The OCR Compound Index is calculated and published, via email, each business day and is an overnight index. Term risk free compound rates in-arrears can be calculated for any period using the calculator provided in the daily email or on the NZFMA website.
Business day A ‘good’ business day is defined as a day on which banks in New Zealand are generally open for business, or a day other than one on which banks in New Zealand are obliged or permitted to close – specifically excluding Saturday and Sunday.
Essentially, good business days are weekdays (Monday to Friday) other than public holidays. Wellington and Auckland Anniversary days are considered public holidays as per NZFMA OIS conventions.
Day count Actual/365 Start date The start date for the OCR compound Index will be the previous ‘good’ business day.
End date The day on which OCR compound index is calculated and published. The end date will always be a good business day.
The settlement convention will be T+0. Rounding OCR Compound Index is rounded to 12 decimal places.
OCR Compound Index will be published at 10.41am NZST/NZDT via email to existing BKBM subscribers from 01 December 2020. The OCR Compound Index will be free to air with a 24 hour delay on the NZFMA’s website.
OCR Compound Index methodology
The OCR Compound Index will be calculated as: OCR Compound Indexi = OCR Compound Indexi-1 x (1 + ���� � ��−1 365 ) Where: OCR Compound Indexi = The index for the date i, calculated and published on date 1, published to 12 decimal places (OCR Compound Indexi =100.000000000000 on 17 March 1999) OCR Compound Indexi-1 = The OCR Compound Index for the business day i-1, calculated on business day i-1, rounded to 12 decimal places ai-1 = The number of calendar days for which OCRi applies. This is equal to the number of calendar days between business day i and business day i-1 Calculating compounded term OCR rates in arrears (NZONIA) from the index The NZFMA has chosen, at this point, not to publish tenor based NZONIA rates, preferring instead to provide a calculator that can be used to calculate NZONIA in-arrears across any user defined tenor. To calculate the compounded OCR in arrears rate for any tenor, the following formula should be used: Compounded OCR rate between x and y = ( !”# “%&’%()* +),-! !”# “%&’%() +)*,-“ − 1) x ./0 * Where: x = start day of the reference period y = end day of the reference period d = the number of days in the calendar period This calculation methodology can also be used to calculate a lookback using observation shift should it be required. The index does not support simple lookback calculations.
OCR value date OCR rate OCR Compound Index Mon 20 July 2020 0.25% 242.262243793520 Tues 21 July 2020 0.25% 242.263903123957 Weds 22 July 2020 0.25% 242.265562465759 Thurs 23 July 2020 0.25% 242.267221818926
Fri 24 July 2020 0.25% 242.268881183459 Mon 27 July 2020 0.25% 242.273859311154 Tues 28 July 2020 0.25% 242.275518721149 Weds 29 July 2020 0.25% 242.277178142510 Thurs 30 July 2020 0.25% 242.278837575237
Example one – start and end date for the period 23 July 2020 to 30 July: NZONIA = ( !”# “%&’%()* +),-! !”# “%&’%() +)*,-“ − 1) x ./0 * = ( 121.1455.40401.4 121.1/411656571/ -1) x ./0 4 = 0.2500044031% Example two – start and end date for the period 23 July 2020 to 30 July with a two day observation shift (21 July to 28 July): NZONIA = ( !”# “%&’%()* +),-! !”# “%&’%() +)*,-“ -1) x ./0 * = (121.140065416627 121.1/.78.61.704 − 1) � ./0 4 = 0.2500044031%
My words March 5th and restated over many weeks: NZD/USD as bottom currency becomes the defining pair by a break of 0.7138. A break lower brings down the house to non USD pairs, specifically GBP/USD and AUD/USD.
EUR/USD already broke 1.`1941 then it became a matter of time for NZD/USD to follow then AUD/USD and GBP/USD.
NZD/USD broke 0.7116 yesterday and that was required for AUD/USD to break 0.7643 and today’s GBP/USD break at 1.3701. USD pairs followed higher and those are EUR/AUD, GBP/AUD, EUR/NZD, GBP/NZD and EUR/GBP.
USD/JPY and JPY cross pairs lower. Formal breaks to EUR, GBP, AUD and NZD will end the false reporting over weeks to Yields runs USD/JPY. The Correlation problem USD/JPY contains with GBP, EUR, NZD and AUD will now break from positive to negative. And in its rightful currency market position.
AUD/USD downside is as good to EUR/AUD 1.5656 from current 1.5544. EUR/AUD breaks higher then much lower for AUD/USD. Next significant AUD points 0.7607, 0.7575 and 0.7509.
EUR/USD and NZD/USD are both deeply oversold and impossible to trade short. GBP/USD is the only hope for shorts but 1.3645 stops further downside for today. EUR/USD next points are located at 1.1856, 1.1891 and 1.1927.
As usual over last 10 years: accuracy, correct commentary, correct entries and targets. I’ll never hurt reader accounts by throwing out thin air numbers, offering false commentary or offering phantom set ups.
I urge readers to view entries, targets and commentaries from the websites and you find easily 80% wrong. GBP/JPY at 152 wasn’t flashing green, only 1 bank was correct to 128 EUR/JPY and the other bank wrong to 132 on the very same day. The list, stories, inaccuracies and hypocrisies from websites are long, endless and a disgrace to the trading world. Buyer beware.
Problem pair USD/JPY is not only a mis location dilemma but a correlation predicament. AUD/USD correlations to its cross run as correlational correct but USD/JPY permeated AUD/USD and AUD cross pairs. If USD/JPY indulged itself inside AUD then its assumed USD/JPY fixated inside NZD, EUR and GBP.
The question is what is the USD/JPY price driver rather than what drives AUD. Correlations are factored from MA and AUD/USD trades above 0.7647 and USD/JPY above 106.00’s. A correlational break would change if AUD/USD breaks below.
AUD/USD Vs Cross Pair Correlations
AUD/USD Vs AUD/JPY +93% AUD/USD Vs AUD/CHF +91% AUD/USD Vs AUD/CAD +78%.
AUD/USD Vs AUD/NZD +45 %.
USD/JPY Vs AUD
USD/JPY Vs AUD/USD +70% USD/JPY Vs AUD/JPY + 90% USD/JPY Vs AUD/CHF +92%
USD/JPY Vs AUD/NZD +96%. USD/JPY Vs AUD/CAD +15%
USD/JPY longs and shorts are the exact same trades as longs and shorts to AUD. USD/CAD Vs S&P’s and Toronto Index
USD/CAD rose 161 pips yesterday, a 1.3% increase to 0.015486 as a decimal while Toronto dropped 146 points or minus 0.772% or as a decimal -0.00772. Normally, Toronto is a big mover index and trades 3 and 400 pip days. Its outperforms daily USD/CAD.
The S&P bottom today is located at 3895.88 and 3859.30. USD/CAD bottom is located at 1.2435 and 1.2450. Toronto bottom today is located at 18742.28. The S&P’s lack movement and USD/CAD generally outperforms the S&P’s.
Both stock markets open at 9:30 am EST. The BOC releases interest rates at 9:00 am and the day is set for Toronto and USD/CAD until the famous BOC Noon Day then Ottawa 12 pm.
Previously highlighted GBP/CHF as best to trade stock indices due to GBP/CHF as the currency market’s most balanced and neutral currency pair of the 28 pairs. The methodology is GBP/CHF serves as the center line to index prices. Longs above GBP/CHF and shorts below would result in profits. However, stock indices of the respective nation were designed to trade against the particular nation’s exchange rate
Today’s DAX traded 128 points and the EUR/USD traded 73 pips within DAX trading hours. DAX closed at 14775.52 EUR for the Cash Price or 17600.00 USD while Futures closed 14686.00 EUR or 17493.96 USD.
DAX rose from 14667.42 to 14808.75 while the EUR/USD dropped from 1.1987 to 1.1915. In Decimal terms, DAX rose from 146.67 to 148.08 . DAX is now arranged as a currency pair and trades most closely to EUR/CAD and GBP/JPY.
DAX rose 1.23% from the Cash Price or 0.0123 while EUR/USD dropped 51% or 0.0051. EUR/USD now traded 1.1917 or 0.011917. Imperative for exchange rates to trade and quote 6 decimal places.
DAX contains 3 vital time frames: 3 AM EST to 6 AM EST, then 6 AM to 10 AM and 10 AM to the close. From 2:30 and 3 to 6 AM, DAX and EUR/USD begin normal associations as day trades as exchange rates and DAX align properly and normally as opposite Correlations.
At 6 AM, the ECB changes interest rates and the best moves for the day are seen during the 6 AM hour. DAX and EUR/USD then trade from 6 to 10 AM then the ECB enters the market to price EUR/USD. DAX next best trade for the hour is at ECB 10 AM. Then next comes 10 AM to close.
From 3 AM to 6 AM, DAX traded + 118 points while EUR/USD dropped 54 pips. At 6 AM, DAX dropped 72 points while EUR/USD traded 11 pips lower. From 6 to 10 AM, DAX traded 97 points higher while EUR/USD dropped 41 pips. EUR/USD and DAX separated from 6 to 10. EUR/USD rose in the last hours of trade while DAX dropped.
Maximum DAX point movements are generally located at 140 points. For tomorrow, 14923.28 represents the maximum location and shorts are located here.
Normal DAX movements are located at 70 ish points. For tomorrow, 73.88 represents normal tops and located at 14840.49. Next short for the day is located here.
To achieve 14840.49, DAX must break 73.88 divide 2 or 36.94 then 14812.46.
Bottoms are located at 14701.64 and 14680.67. Bottom for DAX is USD bottoms.
DAX is actually USD/EUR and rises with USD and falls with EUR/USD. Opposite Correlations from EUR/USD to DAX translates as positive to USD/EUR but from certain time frames.
Tomorrow’s DAX trades as 73.88, 36.94, 18.47, 9.23 and 4.61. This translates to 14738.58, 14775.42, 14812.46, 14849.40 and Maximum at 14923.28. Vital must break points are located at 14680.67, 14803.22 and 14870.98
DAX is traded longs and shorts in intervals at 36.94 and 73.88 for tomorrow. Slight variations exist for the next days trade but the overall point movement formula never changes.
Since the Gold short from 1815 to 1727 for +88 points, Gold in the past 11 days from 1727 ranged from 1675 lows and 1754 highs or 52 points below and 27 pips above. Not much happening here as the overall range remains 1642 to 1815. Gold ranged traded for 11 days. Not only was the easiest trade taken but known in advance was Gold’s dead range and no longer an interest.
GBP/JPY achieved 152.03 highs yesterday morning and traded 69 pips lower to 151.34. GBP/JPY bounced from yesterday’s Fed from 151.34 to again 152.06. As of yesterday morning, GBP/JPY was located here 152.17, 152.26 and 152.36.
Above numbers are not only the last 3 points above in the price series but longs were impossible as GBP/JPY was at the highs of the day. Impossible to take an overbought trade long to target higher overbought. Its beyond gambling.
longer term, GBP/JPY rose 2600 pips from 126 lows and this means the overall trade strategy contains short only until GBP/JPY achieves proper levels. If GBP/JPY decides to trade higher than 152.00’s then more money will profit from shorts.
USD/CAD dropped from 1.2486 to 1.2410 or 76 pips. Note the dead center position of 1.2486 in relation to yesterday’s Fed. 1.2457, 1.2465, 1.2473, 1.2481, 1.2489, 1.2497, 1.2505 and 1.2513. USD/CAD dropped to 1.2410 as in this price series: 1.2387, 1.2398, 1.2402, 1.2414, 1.2418, 1.2426, 1.2434, 1.2442.
USD/CAD dropped from dead center above to exact middle location to its bottoms. USD/CAD was 27 pips from its highs and a much smarter trade than GBP/JPY. USD/CAD now deeply oversold at the lows of the week and oversold from 1.4500 highs, only strategy is long only until USD/CAD achieves proper levels.
GBP/USD Vs USD/CAD now spreads 1500 pips from 1400 yesterday to inform a big move is ahead. Overbought and severe problem pair USD/JPY dropped from 109.25 as 110.00’s contains much resistance for USD/JPY.
Overall, price are headed right back to where they started yesterday. EUR/USD for example 2 big points are located at 1.1984 and 1.2020. EUR/USD breached 1.1984 but now trades 1.1934 lows and heading lower. Same for AUD, GBP and NZD.
GOLD Vs 10 Year Yields
A macro guy Miles Ruttan posted below charts on FXSreet. Quite interesting so below are actual monthly average Correlations.
The 10-year yield & gold correlation:
2016: The 10-year yield’s bottom = gold’s top. 2018: The 10-year yield’s top = gold’s bottom. 2020: the 10-year yield’s bottom = gold’s top.
10 Year Yield Range 1.3305 to 1.8448 or 51 points Vs Gold 1815 vs 1642 or 173 points.
Correlations Gold Vs 10 Year
6M Averages -0.31
1Y = +31% 2Y = -0.80% 3Y = -0.86% 4Y = -0.86%
5Y = -0.77% 6Y = -0.71% 7Y = -0.70 8Y = -0.71
Beside the 1 year with slight problems to short term variation, correlations are solid.
FX Empire doesn’t respond to my articles. Their loss to readers. Those contributors lose tons of money to readers. But it was never about readers earning money, its about website profits only. Same for all websites. The hell with the readers but not that readers are mandated to earn free money either.
The nuts and biggest losers command attention and control the asylum, especially FX Street. They can all throw me off cause I don’t care. I’ll find something else to do in life.
FX Forecasts from Websites and Today’s traders. Looks like, could be, might be. If this, then that.
In the 3 most vital currency pair composition to overall currency markets, GBP/USD trades high 1.3800’s, USD/CAD high 1.2400’s and GBP/JPY middle 151.00’s. GBP/USD Vs USD/CAD spreads 1400 pips and massively high for any normal market standards. The spread should trade at least 3 to 600 pips. GBP/USD to GBP/JPY separates 1300 pips and far to high. USD/CAD to GBP/JPY distance at 2700 pips is massive and not normal.
The market order at USD/CAD 1.2400, GBP/USD 1.3800 and GBP/JPY 151.00’s is correct but prices are wrong as related to distance.
By view of spreads, GBP/JPY is off kilter and its price is high to GBP/USD and USD/CAD. GBP/USD is high in relation to USD/CAD or possibly USD/CAD is low to GBP/USD. GBP/USD as middle pair must view trades to GBP/JPY and USD/CAD then GBP/USD will follow due to position as middle currency pair.
USD/CAD short and long term most vital averages are located at 1.2046, 1.2316, 1.2587, 1.2719 and 1.3125. USD/CAD at 1.2450’s is not only massively oversold to its day trade but the weekly trade as well.
USD/CAD’s weekly trade strategy: Long Anywhere or 1.2443 and 1.2432 to target 1.2687. Long anywhere as entry doesn’t matter due to severe oversold prices. USD/CAD achieved lows for the week at 1.2433. The big break is located at 1.2587.
The NZD /USD weekly and daily trades aligned perfectly to shorts for the week. Weekly shorts at 0.7222 and 0.7230 aligned to yesterday’s daily up target at 0.7226. Yesterday, NZD/USD traded to 0.7212 and middle or neutral portion of the daily up range.
NZD/USD for today’s top is located at 0.7226 and 0.7233 and trades 0.7182 with a weekly target at 0.7145. Why 0.7145 is because NZD’s big high / low break is located at today’s 0.7122. A break at 0.7122 changes the USD and Non USD market dynamic to solid long USD and short non USD.
The 2 most vital yet to break is AUD/USD at today’s 0.7644 then GBP/USD at today’s 1.3705.
NZD’s bottom today is located at 0.7170 and 0.7161 which means 0.7145 to achieve on this day may occur after ECB at 10 am EST. The ECB will reveal what’s on their mind to 0.7122. EUR/USD remains below its dropping vital line at 1.1988 then most important at 1.2020.
Charts may reveal USD yields rise and JPY yields drop and it may indicate a big move but in reality to factor exchange rates to the yields, no difference exists. And despite negative JPY and positive USD yields. JPY is extraordinarily deceptive as a currency pair.
The RBA met overnight and as usual nothing happened. The Fed meets today. As usual pay no attention as they see all coming.
Much lower for USD/JPY must break the 5 year average at 108.98 then next 106.60. USD/JPY is traded as a day trade only and rarely if ever as a weekly or long term trade because its a horrible currency pair and lacks range movements. Better pairs exist.
USD/JPY last week traded 81 pips from 108.34 to 109.15 or 16 points per day. The 2 year yield last week traded 4 points from 0.13 to 0.17 or 0.8 per day. The 3 Year Yield last week traded point from 0.14 to 0.15.
The 5 Year Year Yield traded 0.74 to 0.86 or 12 points at 2.4 points per day. The 7 Year Yield traded 1.29 to 1.15 or 14 at 2.8 points per day. The 10 year Yield traded 1.61 to 1.47 or 14 points at 2.8 points per day.
Japanese yields for equal maturities dropped last week. Because Currency pairs are constructed as opposites, one side of the pair forecasts tops while the other side forecasts bottoms when factored to yields. For EUR/USD, the USD side forecasts tops while German Yields predicts bottoms.
Are Japanese or USD yields the driver to USD/JPY price moves or are any yields responsible for USD/JPY movements. Yields are not only dead but not an issue nor answerable to USD/JPY price moves. Yields by Fed standards are secondary market instruments, a late market mover and seen by charts but priced from interest rates and not seen by charts. But charts lie and not even close to accurate.
That’s why all the trade posts say if this then that, could be, might be, maybe, possible. Yields are the latest flavor of the day to waste mention in trade posts. The USD/JPY move was already forecasted and profited for the day or week despite a late yield move. How does 81 points factor to 2 and 12 point yield moves.
In January, USD/JPY moved 231 pips from 102.63 to 104.94. February 229 pips from 104.34 to 106.63. Were yields responsible for those moves ? Of course not.
Recall January’s posted long term forecast to USD/JPY from then 103.00s. Vital points were located at 106.00, 107.10, 108.02 and the 5 year average at 109.29. Top averages were located at 110.00’s and 111.00’s.
Taken a step further to apply FX math to USD and JPY yields, here’s forecast results to targets and averages.
2 Year JPY Yield = 110.24 Vs USD 2 year yield = 110.44 or 110.24 Vs 110.44. JPY 3 Year Yield = 110.31 Vs USD 3 year Yield = 114.17 or 110.31 vs 114.17 and mid point to 112.24.
JPY 5 year Yield = 111.49 vs USD 5 year Yield = 110.79 or 111.49 Vs 110.79. JPY 10 Year Yield = 109.84 Vs USD 10 year Yield = 122.52 and mid point 116.18.
The end result is forecast in January comports to exactly what is traded today despite yields. Over +90% to what is discussed as market movers today to profit is not required to profit. The articles today are a sham foisted on the public from the financial maestros of our day.