USD/CAD’s long term target reported January and updated in March at 1.3168 and 1.3033 traded today at 1.3150. USD/CAD actually formed a double bottom on today’s hourly chart at 1.3150. USD/CAD for January and February traded a range from 1.3200’s to 1.3600’s then broke 1.3500’s in March to trade 1.3800’s.
Since March at 1.3800 highs, USD/CAD spent 3 months trading to the 1.3168 target. Yet overall USD/CAD’s price path traded on the uneven side. The break of vital 1.3500’s delayed target completion much sooner than anticipated. The commonality to the target was 700 pips from 1.3800 highs or 300 X 2 and the same pip amount targets reported for all trades from January to March.
From USD/CAD, next travels to hubris and pomposity. Once a target is identified, its mathematically impossible not to trade to target. The specialty is targets and this is known from 12 years and gazillions of past trades posted at FXStreet.
No such concept as loss exists once a target is identified. Time may or may not remain on the right side. January to March trades all traded perfectly but USD/CAD decided to wait an additional 3 months. Never, ever doubt the target as we can’t defeat mathematics.
USD/CAD averages radically changed over the past 6 months. On the bottom side exists 1.2860 and 1.2613. On the topside we have 1.3124, 1.3204 and 1.3395. Next targets below are 1.2999 and 1.2950. Above 1.3124 targets are: 1.3180, 1.3290 and 1.3298.
The USD/CAD price upon target completion is now a settled and range price. No longer does a 700 pip trade exists and may not materialize for the next 1 and 2 years. This means USD/CAD now shifts to profits from the 7 and 24 hour and weekly trades.
Most vital to the YCC bands is 0.5 rather than minus 0.5. The BOJ must be laughing hysterical as they played the trading crowds like a fiddle. Every central bank on the planet contains their own personal YCC bands within the context of the yield curve. Most central bank bands are much smaller than the BOJ because the BOJ must address JPY/USD and 7 numbers as current USD/JPY 141.89 Vs JPY/USD 0.0070477.
The BOJ says we are buying bonds between 0.5 to minus 0.5 or 1.5 and 100 basis points. This works for Monetary policy and to achieve and sustain the 2% Inflation target but contains zero and tiny effects for USD/JPY. The BOJ uses export and interest rate methods to address levels of USD/JPY but only when JPY/USD is affected.
The BOJ doesn’t give a lick to USD/JPY levels until JPY/USD becomes an Economic problem.
Credit to the BOJ as they see early warning to economic problems ahead as they view exchange rate levels for USD/JPY and JPY/USD in 1000 and 2000 pip increments. All central banks traditionally pre 2016 viewed exchange rate levels in 1000 and 2000 pip increments but disbanded this practice upon the new post 2016 interest rate changes. The BOJ maintained the old practice to the long view as did a few EM central banks such as Norway, South Africa, Brazil, Turkey.
DXY maintained a tiny range as forecasted Sunday due to many averages above 102.00’s and falling on the current DXY price. DXY remains in the same position for next week aa 101.00’s become oversold and 103.00’s are blocked by many averages. DXY will eventually trade to 100.00’s and challenge the 50 year monthly average at 99.00’s.
Overbought GBP/USD held 1.2850 and traded to 1.2837 highs and lows to 1.2690. GBP/USD big break for higher is now 1.2857 and overbought begins at low 1.2800’s and targets easily 1.2712 and 1.2618. GBP/USD overall traded 1.2501, 1.2618, 1.2857 and 1.3250.
EUR/USD target at 1.1037 traded to 1.1003. EUR/USD trades 1.0818, 1.0935 and 1.1117. EUR/USD trades massive overbought and 1.0935 becomes the vital level for shorts next week.
GBP/CHF trades a 372 pip range from 1.1324 to 1.1696. Currently GBP/CHF trades overbought from 1.1443 and consistent to overbought GBP/USD.
EUR/CHF trades 0.9801 to 1.0136 and currently on the verge of a break at 0.9801. Oversold next week begins at 0.9759 on a break at 0.9801 and a good long trade for next week.
AUD/USD trades 0.6742 to 0.6919. AUD/USD threatens a break at 0.6742 to trade back to 0.6600’s as low 0.6800’s becomes overbought.
NZD/USD trades 0.6192 to 0.6404. Break at 0.6192 targets middle 0.6100’s and long again to middle 0.6200’s.
USD/JPY lows traded to `141.20 and target at 140.03. Next week targets 140.77 then 140.14.
DXY small ranges is holding up progess yet again in order for currency prices to trade a pip for pip basis. Currency markets are trading the percentage basis trades. Same story for next week.
EUR/AUD shorts for next week as EUR/AUD is now held higher by 1.6049. GBP/AUD shorts next week targets again at 1.8600’s as GBP/AUD is also held at 1.8544 in order to travel lower.
GBP/NZD no changes to 1.0670 and targets at 2.0300’s, 2.0200’s and 2.0100’s. Lows this week achieved 2.0527 and targets 2.0300’s for next week. GBP/NZD is preferred over EUR/NZD as the better trade.
GBP/CAD and EUR/CAD trade not only mid range but highly divergent to each other. Higher GBP/CAD at 1.6900’s then short and compliance to overbought GBP/USD and GBP/CHF.
Volatility definition. Measured by pips and ranges.