DXY for the past 8 weeks traded in a fairly straight line from 103.00’s to 99.00’s As the July lows achieved 99.00’s , DXY not only traded to high 102.00’s but supports were created at 100.38, 100.81, 101.07 and 101.20. This week, DXY traded freely at 128 pips inside open ranges from 101.00’s to overbought 102.00’s.
DXY next week trades the same 101.00 to overbought upper 102.00 ranges. At current 102.74, DXY lacks ability to trade and sustain high 102.00’s and low 103.00’s. DXY next week must correct lower and break 102.17 and 102.08 to trade low 101.00’s.
The DXY drop from 104.00 and upper 103.00’s since last May revealed the same scenario as the current rise from 99.00’s. With every rise and fall to DXY, a support or resistance point materializes above or below the price in order to strangle DXY inside permanent 100 and 200 pip ranges. Weeks at 200 open ranges trades far better and wider parameters than 100 pip weeks.
DXY as USD market leader is solely responsible for the questions to how high, low or how far will markets range. DXY’s 128 pips this week is matched by EUR/USD at 128, GBP/USD 193, AUD/USD 213, NZD/USD 161 pips, SPX at 88 and XAU/USD at 42.
DXY excess to overbought allowed USD/JPY and JPY cross pairs to trade far higher degrees of overbought at 300 and 400 pip ranges and to include 400 pips to EUR/AUD, GBP/AUD and GBP/NZD. Each trade a X 2 price event particularly USD/JPY and JPY cross pairs.
EUR/USD lacks the advantage of market leader as 1/2 EUR/USD pips is matched by trading 1/2 USD/EUR. EUR/USD follows DXY and USD currencies as both are responsible for EUR/USD movements.
Next Week
Trades offered this week to EUR/AUD, GBP/AUD, EUR/NZD and GBP/NZD achieved targets for + 1000 pips and targets completed Monday.
DXY overbought remains on a short only strategy to target the 99.00 break.
EUR/USD higher next week must break 1.0957 and 1.0968 to target 1.1055. The break above 1.0968 places EUR/USD’s range from 1.0968 to 1.1128. EUR/USD trades is oversold due to a tiny degree and enough to maintain a long only strategy.
GBP/USD trades just above massive supports at 1.2689 and 1.2677 and ranges from 1.2677 to 1.2877 then 1.2877 to 1.3254. GBP/USD this week dropped 193 pips from vital 1.2872. We’re long for next week to target the break above 1.2877. Overall, slight oversold to GBP/USD and derived from longer term averages.
AUD/USD trades massive oversold from short, medium and long term averages. AUD/USD must break above 0.6713 to trade 0.6713 to 0.6899. Targets are located at 0.6729, 0.6840 and 0.6873.
AUD/USD and GBP/USD are not only the same currency but daily ranges are well matched almost exactly. Take AUD/USD and GBP/USD long for next week for double trades and profits.
NZD/USD trades severely oversold to averages short, medium and long term. NZD/USD higher must break 0.6204 to trade 0.6204 to 0.6385. NZD/USD first target is located at 0.6199 and above 0.6204 targets 0.6221 and 0.6238. Long only is the only NZD strategy.
EUR/AUD last week: overbought and entries are located Anywhere to target EUR/AUD 1.6469 and 1.6379 on a break of 1.6469.EUR/AUD achieved 1.6352 on Monday from 1.6569.
EUR/AUD at Richter scale overbought at 1.6700’s, targets easily 1.6519 next week and much lower longer term. EUR/AUD will eventually break 1.6325 to trade 1.6200’s easily then 1.6100’s.
GBP/AUD last week: GBP/AUD targets easily 1.9169 then 1.9007. GBP/AUD traded lows at 1.9075 from 1.9321.
GBP/AUD overbought targets next week easily 1.9256 and 1.8900’s longer term
GBP/AUD and EUR/AUD remain trading short only strategies.
USD/JPY’s target last week: 141.21 then 140.14. Lows this week traded to 142.22 from 143.54 highs. Next week targets 141.86 easily then 140.69.
GBP/NZD targets 2.0837 then 2.0647while EUR/NZD targets 1.7878 then 1.7772.
Next week begins as last week: shorts to preferred wide range currencies EUR/AUD, GBP/AUD, GBP/NZD, EUR/NZD.
Next is the combination to USD/JPY and JPY cross pairs. GBP/USD and AUD/USD complete the 3rd set of trades.
GBP/JPY target last week at 179.50 and GBP/JPY lows achieved at 181.18. Still 2 days remain to the trade week however targets next week are located at 179.83 and 178.45.
EUR/JPY target last week at 154.64 holds with 2 trade days to the week remaining. Lows so far traded 155.96. Next week targets 154.77 and 153.83.
USD/CAD severely overbought target the break below 1.3313 then 1.3265 and 1.3216. Lower targets for USD/CAD are minimums as USD/CAD targets again longer term 1.3100’s.
Brian Twomey
Tianzuida ON TRADING 