Last week, DXY failed to achieve overbought status at 103.00’s nor trade to oversold at 101.00’s. DXY matched EUR/USD’s 134 pip performance last week and this week will trade a repeat production to a lackluster exercise.
DXY’s close at 102.01 begins the week dead center to overbought 103.00’s and oversold at 101.00’s and positions currency markets to not only neutral situations but under severely compressed ranges.
EUR/USD for example trades from vital 1.0955 to overbought 1.1046 while GBP/USD ranges from 1.2677 to overbought 1.2856. USD/JPY trades 143.00’s to 141.00’s.Not only are ranges in compression mode but vital break are required to trade a fairly normal market this week.
DXY is the driver this week and as the market leader , not only is range trading expected but major breaks at vital levels will fail. A range market is just as good to trades and profits as trend situations.
Currency market positions. The question to positions refers to price locations. EUR/USD for example traded 134 pips this week but EUR/USD begins this week in the exact same position where it started last week. The only change to EUR/USD was the exchange rate number but the position remains exactly the same.
Same situation for GBP/USD. If one currency trades in the same locations then all have a tendency to also trade in the same position.
To understand positions and locations automatically allows for analysis to types of traded markets to ranges Vs trend, information to vital breaks and assists to entries and targets.
The Week
Applied this week is the same standards since December / January by short DXY and USD and long EUR, GBP and non USD as DXY will eventually again challenge and break 99.00’s. From 102.00 and 300 pips to 99.00’s , EUR/USD and GBP/USD conforms to 300 pips higher.
GBP/USD Runs into a brick wall at 1.2856 and 1.2875. GBP/USD ranges from 1.2677 to 1.2856 and 1.2875.
EUR/USD trades 1.0955 to 1.1046 and 1.1078. Most vital to EUR/USD is the usual level at 1.0967. At 1.0967 decides EUR/USD ranges from 1.0955 to 1.0967 or 1.0967 to 1.1127.
AUD/USD and NZD/USD remains massive oversold. A good trade strategy is trade GBP/USD and AUD/USD together to double range profits as both are not only the same currency but AUD/USD maintains daily and weekly pip ranges in conjunction to GBP/USD.
AUD/USD requires a break at 0.6697 to travel higher and NZD/USD 0.6193.
USD/JPY The BOJ informs trade ranges from 143.60 to 141.63. USD/JPY higher must break 142.26.
GBP/JPY big break for lower is located at 177.25. GBP/JPY averages are moving lower yet slowly. We remain short only strategies to JPY cross pairs.
EUR/CAD remains last on the trade list as EUR/CAD contains severe range problems. GBP/CAD short is the preferred trade.
USD/CAD watch the break at 1.3326 for lower. The current USD/CAD price at 1.3379 doesn’t exist as the price is missing. No such concept as long USD/CAD exists for at least the last 80 and 90 pips.
Preferred trades for best profits this week: GBP/AUD, EUR/AUD, GBP/NZD, EUR/NZD
USD/EM
USD/EM currencies is a reflection to DXY as the driver currency this week.
USD/CZK trades massive overbought and targets easily 21.9248 then 21.8930.
Brian Twomey
Tianzuida ON TRADING 