Currency markets this week are not only dictated by EUR/USD’s 5 year average at 1.1524 Vs DXY at 95.05 but more significant divergence exists between EUR/USD and GBP/USD Vs AUD/USD and NZD/USD.
AUD/USD is driven by deeply oversold averages at 0.7193, 0.7240 and 0.7350. AUD/USD’s 50 to 253 day averages are located from 0.7177 to 0.7344 and all sit at deeply oversold.
AUD/USD oversold conforms to AUD/JPY, AUD/CHF and AUD/CAD while EUR/AUD and GBP/AUD begin the week at Richter scale overbought.
NZD/USD is in the same situation as AUD/USD as NZD/USD is deeply oversold from driver averages at 0.6773, 0.6823 and 0.6889. The 50 to 253 day averages from 0.6745 to 0.6964 also sit massive oversold.
Oversold exists to NZD cross pairs NZD/JPY, NZD/CHF and NZD/CAD while EUR/NZD and GBP/NZD begin the week in the overbought stratosphere. GBP/NZD approaches the 14 year average at 2.0578 and EUR/NZD at 1.7344.
As currency markets trade back to the doldrums from last week’s rare trade range animation, the numbers 100 to 125 applies to this week’s form.
AUD/USD for example targets first 0.7136 then 0.7155 or less than 100 pips while NZD/USD targets first 0.6723 or 110 pips on a long only strategy.
USD/CAD’s 124 weekly pips last week or 1/2 of GBP/USD is explained by 1.2630, 1.2640 and 1.2651 Vs 1.2826. Despite a 175 pips range and overbought, CAD/CHF as the complement currency to CAD/JPY remains the USD/CAD problem to small ranges.
EUR/USD’s 130 pips are located at 1.1384, 1.1385 Vs 1.1524, 1.1530 and 1.1542. Overbought EUR cross pairs EUR/JPY, EUR/CHF, EUR/CAD and EUR/GBP assists to take EUR/USD lower.
GBP/USD Day Trade Results
GBP/USD traded 240 pips last week or an hourly average of 3.33 pips based on 72 weekly trade hours. GBP/USD 2 weeks ago traded 195 weekly pips or an hourly average of 2.70 pips.
GBP/USD traded 10 of 72 trade hours above 27 pips for a total of a 41 pip average or 4.1 pip hourly average based on 10 hours of trade.
For the 10 best trade hours, GBP/USD spent 13.89% of its time on 72 trade hours under terrific trades thanks to BOE. For BOE, GBP/USD traded 3 good hours, 1 good hour for NFP and the remainder 6 hours, traders had to fight for profit pips.
GBP/USD spent 44.64% of its time on 72 trade hours or exactly 62 hours at 20 pips and under for each of 62 hours.
Fibonacci numbers hit its hourly target possibly 4 or 5 hours of 72 hours. Not only is Fibonacci square roots of 5 off base to statistics and simple averages but trading GBP/USD alone based on Fibonacci excludes the USD side to the exchange rate and explains why targets miss.
GBP/USD or any currency pair and financial instrument trades a day trade as GBP/USD and USD/GBP or EUR/USD and USD/EUR, USD/CAD and CAD/USD, GBP/NZD and NZD/GBP.
EM currencies are much easier to trade and profit due to the wide variations in such pairs as USD/TRY and TRY/USD, USD/PLN and PLN/USD, USD/BRL and BRL/USD, USD/ZAR and ZAR/USD, RON, DKK and CNY.
The opposite of the reciprocals for each exchange rate side to any financial instrument is assigned separate daily ranges. As GBP/USD trades higher then USD/GBP must trade lower and vice versa. USD/GBP and the USD side to any currency pair is the containment side to prevent GBP/USD from trading to astronomical levels.
Factor daily ranges and hourly movements to USD/GBP and GBP/USD then hourly Fibonacci misses it target and despite many attempts to find how and where Fibonacci works.
Add to hourly Fibonacci is the guaranteed miss to weekly trades. The answer is found in the day trade and weekly relationship.
The difference mathematically between the day trade and weekly trades is zero as the day and weekly trade are exactly the same by statistics. The day trade was cut by almost exactly 1/2 to align to weekly trades. The day trade has as much of an equal chance to hit weekly targets.
By day trade cut to 1/2, the central banks changed day trades from multiple longs and shorts per currency pair to 1 trade in 7 1/2 hours of trade. Not only must the day trade enter and exit perfectly to profit but day trade profit opportunities are more severely limited.
All by central bank design and the ECB is the leader of the radical transformations. Read President Hoover’s memoirs from the 1930’s and readers will note Europe, Germany and the ECB remained activist central banks. Nothing changed in the modern day.
The difference mathematically to day trades to GBP/USD and USD/GBP is zero as both are the exact same pair under the exact same statistics and under the exact same entries and targets.
GBP/USD’s weekly target last week was 1.3622. Thursday’s BOE day trade achieved 1.3626. Shame the weekly trade didn’t post.
On my blog at btwomey.com for interested is a massive mathematical break down to day trades as nearly 2 weeks was spent taking a statistical deep dive to day trades previous and current changes.
Statistics is the absolute to demonstrate, examine and prove exactly what’s happening with day trades. Statistics and Math is never required to trade the day trades as central banks offer day trades every trade day.
USD/JPY Weekly Trade
USD/JPY begins the week overbought as well as USD/CAD and USD/CHF. A rare week to big 3 alignment.
The 11th week to weekly trades runs 1401 pips total.
USD/JPY short 115.56 and 115.63 to target 114.53. Long 114.53 to target 114.92.
EM Day Trades
Only vital numbers apply to long bottoms and short tops.
USD/TRY 13.4228, 13.4770, 13.6612, 13.6798 and 13.7362.
USD/BRL 5.2687, 5.2910, 5.3022, 5.3590, 5.3763, 5.3966
USD/PLN 3.9416, 3.9588, 3.9682, 4.0096, 4.0225, 4.0371
USD/RON 4.2716, 4.2881, 4.2992, 4.3440, 4.3572
USD/CNY 6.2893, 6.3131, 6.3251, 6.3979, 6.4143, 6.4391
USD/HUF 302.11, 306.74, 312.50, 313.47, 317.46
USD/DKK 6.4308, 6.4599, 6.4683, 6.5445, 6.5616, 6.5876