Month: October 2022

DXY from the 110.67 close faces massive resistance throughout 111.00’s from 111.04, 111.19, 111.66 and 112.10. Above 112.10 targets middle 113.00’s then short. Failure to break 111.00’s targets 108.00’s.

From current 110.67, targets at 116.00’s drops from contention in favor of 115.00’s as DXY upside is dropping about 100 pips per week. Targets are located every 77 pips and every 72 pips for EUR/USD which means good moves expected this week and EUR/USD will trade almost pip for pip to DXY.

As DXY continues its weekly drop, short USD/CAD and USD/JPY becomes the strategy and long EUR/USD and GBP/USD, AUD and NZD.

JPY Cross Pairs

JPY cross pairs trade severely overbought for 3 weeks running and traveled higher in each of the past 3 weeks. As JPY leader, GBP/JPY broke its 3 year range from 148.00 to 168.00’s and advanced to 171.00’s.

GBP/JPY expedited all JPY cross pairs to trade higher. GBP/JPY now trades overbought from short averages from 5 to 253 days and from long averages at the 5, 10 and 14 year. Target for GBP/JPY is 168.30’s as oversold doesn’t begin until 166.00’s and 164.00’s.

As USD/JPY 147.43 and EUR/JPY 146.83 trade the exact same exchange rates, the overall strategy is short USD/JPY and JPY cross pairs with GBP/JPY leading all currencies lower.

USD/JPY ranges for the week trades from 145.84 to 148.77 vs last week 145.35 to 148.40. Overbought begins above 148.77.

EUR/NZD Vs GBP/AUD and GBP/NZD

GBP/AUD began the month at 1.7200’s and EUR/NZD at 1.7000’s. While EUR/NZD traded to 1.7500 highs, GBP/AUD crossed above EUR/NZD 1.7500’s and achieved tops at 1.8100’s. As GBP/AUD and EUR/NZD fought the battle of dominance, GBP/NZD was absent as leader to EUR/NZD and its only choice was follow EUR/NZD yet GBP/NZD traded 200 pips for October.

GBP/AUD at 1.8099 trades deeply overbought and matches overbought EUR/AUD while EUR/NZD at 1.7100’s trades massive oversold. GBP/NZD is along to follow EUR/NZD ‘s lead. Much lower for EUR/NZD on a must break at 1.6946.

GBP/USD and Cross Pairs

Oversold GBP/USD for the week vacillates against choices to trade to 1.1700’s or 1.1400’s. On a long term basis, targets are located at 1.1882, 1.2280, 1.2538 and 1.2734. GBP/USD contains ability to trade to 1.1800’s easily.

GBP/USD’s problem for the week is all GBP cross pairs are severely overbought to include GBP/JPY, GBP/CHF, GBP/CAD, GBP/AUD and GBP/NZD.

GBP as EM currencies also trades massive overbought as GBP/ZAR, GBP/TRY, GBP/PHP, GBP/SEK, GBP/NOK, GBP/MYR, GBP/HUF, GBP/BRL. GBP is especially overbought as GBP/CNY.

EUR/USD

Similar to GBP/USD, EUR/USD choices for the week is 0.9950 and 0.9902 then 0.9814 and 0.9809 or break above 1.0020 to target 1.0126. EUR/CHF sits on support at 0.9854 while EUR/JPY, EUR/CAD and EUR/AUD trade severely overbought.

As DXY is losing its upside potential, we remain long only to strategy Vs EUR/USD and GBP/USD.

USD/BGN

The Bulgarian Lev is inching closer by the week to break 1.9538 and target 1.9342.

AUD/USD trades 0.6459 to 0.6335 and NZD/USD 0.5801 to 0.5681. Lows trade only if DXY breaks above 111.00’s.

DXY 111.00’s are the deciding factors for the week to drive every financial instrument on this planet.

Brian Twomey

From the weekly on Sunday: EUR/USD broke 0.9993 and first target at 1.0057 achieved destination, USD/JPY from 147.64 completed target at 148.40. DXY broke below 111.25 and traded to 109.00’s. DXY from Sunday struggled and dropped from 112.00’s.

DXY’s break below 111.25 allowed EUR/USD and GBP/USD to break above most vital levels at 0.9993 and 1.1572. EUR/CHF and GBP/CHF assisted EUR/USD and GBP/USD higher by breaks above EUR/CHF 0.9842 and GBP/CHF 1.1381.

AUD/USD and NZD/USD failed to break above vital 0.6578 and NZD/USD 0.5913 to join EUR/USD and GBP/USD. AUD/USD and NZD/USD must break above vital levels or EUR/USD and GBP/USD must drop to maintain uniformity.

EUR/USD levels for today: 1.0072, 1.0078, 1.0084, 1.0091, 1.0104, 1.0110, 1.0117 Vs 1.0015, 1.0021, 1.0027, 1.0040, 1.0050, 1.0053

Most Vital 1.0015 and 1.0040 Vs 1.0091 and 1.0117.

EUR/USD VS DXY

EUR/USD for next week must break 1.0005 and another line around 0.9950 to target again 0.9700’s. Next target above 1.0171. DXY maintains a big break at low 111.00’s to target 113.00’s. DXY traded 302 pips this week to EUR/USD 297. EUR/USD maintain perfect paces to DXY as DXY drives all markets.
EUR/USD strategy is short and long DXY and USD currencies.

Overall DXY is oversold and targets low 111.00’s or 200 ish pips higher and this takes EUR/USD to 0.9800’s if 0.9950’s break below.

USD/CAD trades oversold and just above big break for lower at 1.3423. Oversold USD/JPY maintain a range from 144.41 to 145.93. Above targets again 148.98. Watch USD/CHF at 0.9844.

JPY Cross Pairs

JPY cross pairs 2 weeks running trades severely overbought to include CHF/JPY. JPY cross pairs are range trading rather than break or focus on breaks at vital averages in order to trend. JPY cross pairs are pretty much day trades with a short only trade strategy.

GBP/JPY leads the way forward while EUR/JPY traded in tiny ranges this week.. Both USD/JPY and EUR/JPY trade just above vital 142.00’s. Much lower on a break and GBP/JPY at 164.00’s.

EUR/CAD trades massively overbought while nothing special exist to GBP/CAD except to follow EUR/CAD lower.

GBP/USD big break are located 1.1572 and targets 1.1450 and only below 1.1450targets levels back to 1.1200’s.

AUD/USD and NZD/USD trade in do or die mode to either follow EUR/USD and GBP/USD higher and break vital levels or EUR/USD and GBP/USD trade lower to take AUD/USD and NZD/USD down. Lower for AUD/USD targets 0.6300’s and NZD/USD middle 0.5600’s.

AUD/USD trades practically pips for pip to AUD/EUR and explains EUR/AUD trading in tiny ranges over last weeks. Both AUD/USD and AUD/EUR trade oversold.

GBP/NZD trades overbought vs oversold EUR/NZD. EUR/NZD leads the way for GBP/NZD as EUR/AUD dictates moves to GBP/AUD. Best strategy is shorts to EUR/AUD and EUR/NZD. AUD/USD 0.6578 and NZD/USD 0.5911 holds EUR/AUD and EUR/NZD progress to trade in wider ranges.

Brian Twomey

The Japanese Ministry of Finance releases intervention data every month as leaders to recommend intervention. The BOJ simply applies recommendations under Article 7, Section 3 of the Foreign Exchange and Foreign Trade Act.

Why the question of intervention is vital to today’s traders is because the Japanese don’t ever intervene once and the exchange rate price is settled. The Japanese intervene many, many times during any given month.

Take for example June 1993 when the BOJ intervened 10 times during the month. This is common practice to BOJ intervention. The BOJ intervened 5 times in November 2011 and once October 2011, August and March. Fukishma was the issue then.

The other question is why intervene now when interventions became practically non existent to currency markets since early 2000’s and the 1990’s. Will intervention lead other central banks to intervene or coordinated actions by central banks.

Is intervention the first action to 1930’s style export wars. Export wars of the 1930’s caused volatility as never seen again in currency markets. The swing in prices was far more extraordinary than ever witnessed today. The 1930’s wars gave us Bretton Woods and 1% exchange rate movements in dead currency markets.

In all instances of intervention since 1991, the BOJ never involved themselves in coordinated actions but instead flew solo.

The current data dates to May 1991.

The commonality to intervention months was January to April and rarely June and July. But most specifically March, April and May are heavy intervention months. April represents Japanese budget years and a low yet specific exchange rate is required to fund the budget.

More importantly, USD/JPY begins its 6 month yearly cycle rise from January to April and May. USD/JPY normally achieves its highest yearly level in April then drops to allow EUR/USD to rise from May and June to December.

Remaining months are extraordinarily rare for interventions. Last time the BOJ intervened in October was 2003 and 1994. Next comes 5 times for September, 1993, 1994, 1995, 1999 and 2000. Then comes 4 times for November and 3 times for December 1997, 1999 and 2003. The BOJ intervened once in August 1992.

From May 1991 to August 1992, the BOJ intervened in USD/JPY to short USD and long JPY or buy USD and sell JPY. Then a change occurred. From April 1993 to 2011, the BOJ intervened and bought USD and sold JPY.

For the BOJ to intervene in September to sell USD and buy JPY represents an enormous change to the past 18 year practice.

From 1991 to 2003, the BOJ intervened to USD/JPY nearly 300 times. From 1991 to 2022 or 31 years represents 372 months.

While USD/JPY is the prominent intervention currency, the BOJ began intervention once in August 1993 to buy DEM German Marks and sell JPY. November 1997, the BOJ 5 times intervened to sell USD and buy IDR, the Indonesian Rupiah.

As EUR/JPY and the Euroyen interest rate was introduced in 1997, 1998, the BOJ intervened 3 times in June and November 1999 quite heavily to buy EURO’s and sell JPY. Intervention to EUR/JPY began again to buy EUR, sell JPY March and September 2000. September 2001 and June 2002.

Year 2003 was the last year to intervene on EUR/JPY by 2 times in February 2003, 3 times for March 2003 and once May 2003.

BOJ intervention costs begin around 100 million. Take May 9, 2003 as an example. The monthly range was 119.63 to 118.08. The USD side at 118.08 converts to JPY at 17622.3. Intervention costs 2166. Intervention costs are never at the reciprocal exchange rate as reported by news services. Intervention at the reciprocal exchange rate would vanquish the 1.3 trillion BOJ reserves.

May 9 range to buy USD, sell JPY was 117.59 to 117.02. May 12 range at 3302, traded 117.37 to 116.20. May 13 traded 117.53 to 116.34 at 3037. The BOJ intervened 13 times in May 2003 to miniscule ranges.

While USD/JPY in May 2003 traded 119.63 to 118.08 or 155 pips, DXY traded 97.46 to 92.57 or 489 pips. From 119.63 to 97.46 or 2200 pips and 2500 at 118.08 and 92.57. Current USD/JPY 149.31 and DXY at 112.29 or 3700 pips. As reciprocals 0.0066974 Vs DXY 0.0089055 or a spread at 0.0022081. If a warning shot existed to intervention, possibly its found in the USD/JPY and DXY spread.

Japanese Call rates trade roughly 8 points per day and covers JPY/USD while ECB interest rates trade 15 ish points per day Vs 20 points for Fed Funds. Not much to deduce from this data to intervention.

Brian Twomey

Currency markets begin the week in solid and horrible neutral positions as trading ranges expanded. The outlier to neutral is severely overbought JPY cross pairs and overbought across all JPY pairs. Top 4 currencies in order: GBP/JPY, EUR/JPY, CAD/JPY and NZD/JPY. No thrills exist to AUD/JPY.

The question to Japanese intervention is JPY/USD 22,301.95 equates to 151.00 USD/JPY but the Ministry of Finance spent 2 billion Yen or $13 million USD to intervene at 146.00. Past intervention costs in the 1990’s began at 100 million Yen or roughly $600,000 in today’s rates but USD/JPY was 87.00’s and 90.00’s then so much lower to cost.

As the USD/JPY price travels higher then the cost to intervention rises. Any cost to possible intervention on Friday won’t be known until the monthly release by the Ministry of Finance. I submit no intervention existed Friday and the 146.00 intervention was a one off.

The problem is not USD/JPY but JPY/USD is becoming to low in relation to Japanese Call rates. The Japanese maybe forced to raise Call Rates particularly if DXY travels higher against continued Fed Raises.

The opportune time to intervene was when USD/JPY traded 120.00’s while DXY broke above the 5 year average at 95.00’s. The DXY break may have caused the USD/JPY trajectory to travel lower however USD/JPY and DXY are exact same pairs so the DXY break higher forced USD/JPY higher.

The Week

Trade Rankings

USD/JPY, AUD/USD, NZD/USD, USD/CAD. JPY Cross Pairs= EUR/JPY, NZD/JPY, CAD/JPY, EUR/AUD, EUR/CAD, EUR/NZD, EUR/USD.

We’re cautious and avoiding CHF Cross Pairs, GBP/CHF, GBP/NZD, GBP/CAD and not thrilled to EUR/CAD unless a resolution to 1.3389.

Total 3 GBP pairs earn rankings as GBPUSD, GBP/JPY, GBP/AUD. Overall, EUR//AUD and EUR/NZD are better pairs to trade.

USD and non USD are prime movers this week to cross pairs.

DXY faces headwinds at 112.02 and 112.81 and only then does DXY target 114.00’s. Break of 111.25 targets easily 109.00’a. DXY targets are located 57 pips and every 42 pips for EUR/USD. DXY 117.00’s drops from contention to long term forecasts.

Figure DXY and you’ll have markets licked.

EUR/USD big break for higher is located at 0.9993 and first target is easily 1.0057.

USD/JPY’s next target and big break is found at 148.40 in a range from 145.35 to 148.40.

GBP/USD end of week target is located at 1.1159 and EUR/USD at 0.9675 provided 0.9789 break lower.

Brian Twomey

GB/USD opened the week at 1.1176 and GBP/CHF at 1.1232 or 56 pips. The spread from overnight trading compressed to right at 10 pips at GBP/USD 1.1273 and GBP/CHF at 1.1283.

GBP/USD Big break for the week is located at 1.1326 then 1.1400’s and GBP/CHF 1.1311. GBP/CHF at 1.1311 is far more important than GBP/USD 1.1326 as 1.1311 signifies GBP/CHF trades much higher and GBP/USD follows.

GBP/USD for today must clear 2 hurdles: 1.1260 and 1.1280. Above 1.1280 targets maximum level at 1.1336.

GBP/USD 1.1336 and 1.1326 then operate as a brick wall and short is the only trade. Below targets 1.1224, 1.1231 and 1.1238 then long again. Most vital is GBP/CHF bottom today at 1.1241.

Watch GBP/USD at the GBP/CHF bottom at 1.1241.

Note GBP/USD and GBP/CHF last on the GBP weekly trade rankings as follows: GBP/JPY, GBP/AUD, GBP/NZD, GBP/USD, GBP/CHF, GBP/CAD .

Easy trades and easy money achieve high on the list rather than struggle through the GBP/USD and GBP/CHF dilemma. Far better trades exist although GBP/USD and GBP/CHF contain both daily and weekly trades.

Shorts all week to GBP/JPY, GBP/AUD and GBP/NZD.

Highlighted GBP as a mix match of exchange rates are rare days seen in markets. Remember USD/CAD Vs EUR/JPY or USD/CAD Vs EUR/CAD. Today its CHF.

Remainder currency rankings: EUR/USD, EUR/JPY, AUD/USD, EUR/AUD, NZD/USD, USD/CAD, EUR/CAD, EUR/NZD, USD/JPY, AUD/CHF, NZD/CHF, CAD/CHF, CAD/JPY, AUD/JPY, NZD/JPY.

Best from the overall: EUR/USD, EUR/JPY, AUD/USD, EUR/AUD, NZD/USD, USD/CAD, EUR/CAD, EUR/NZD, USD/JPY, AUD/CHF.

EUR/USD Weekly

Long 0.9665 and 0.9661 to target 0.9772. Entry lies just above 0.9586.

EUR/USD Bottom today is located at 0.9692, 0.9699 and 0.9716. Long at the lows for quick pips today but weekly trade entry won’t be seen. The ECB at 10 am may push EUR a few pips lower however not enough for trade entry.

ECB at 10 is becoming more and more irrelevant to day trading as well as the 11 am London FIX which means currency markets are changing yet again to the next phase.

Brian Twomey

The most interesting currency market development this week is the positions of CHF cross pairs as GBP/CHF, EUR/CHF, AUD/CHF, NZD/CHF. Mark this extraordinary situation under the many facets and nuances of the currency price and ascertained by the eyeball of prices to true observers.

To use GBP/USD and GBP/CHF as the examples. GBP/USD Thursday trade to highs at 1.1379 and GBP/CHF to 1.1355. GBP/USD corrected lower as exchange rates traded below GBP/CHF.

GBP’s universe of exchange rates: GBP/CHF, GBP/USD, GBP/JPY, GBP/CAD, GBP/AUD, GBP/NZD. I call this the hierarchy of exchange rates.

The correct positions and purpose of CHF cross pairs is to trade a lower exchange rate than the anchor currencies. Each currency in the universe is allowed a respective range to prevent not only exchange rate crossovers but to ensure anchor currencies don’t trade to wild extremes.

The further purpose is to maintain currency market price uniformity within the universe and to associated currencies. GBP/USD Friday traded to 1.1151 lows while GBP/CHF dead stopped at 1.1211.

If GBP/CHF was correct with an exchange rate below GBP/USD then GBP/USD would’ve never traded to such low depths. GBP/CHF would’ve stopped GBP/USD’s slide lower and GBP/USD to not violate GBP/CHF allotted range space.

As associated currencies, GBP/CHF is the leader currency to CHF cross pairs due to widest ranges. GBP/CHF dead stop at 1.1211 allowed all CHF cross pairs to dead stop but also to allow all anchor pairs mix match to trade below CHF cross pairs.

CAD/CHF is correct at 0.7246 or 1.3800 and trades below USD/CAD.

Note GBP/CAD at the 1.5509 open to the GBP universe. Average all GBP exchange rates and the answer is always GBP/CAD. GBP/CAD owns its space as middle and neutral currency between GBP/CHF, GBP/USD, GBP/JPY Vs GBP/AUD and GBP/NZD and never to violate another GBP currency space.

The Week

The CHF week begins as GBP/CHF 1.1232 Vs GBP/USD 1.1176. AUD/CHF 0.6238 Vs AUD/USD 0.6198, NZD/CHF 0.5592 Vs NZD/USD 0.5558, EUR/CHF 0.9775 Vs EUR/USD 0.9717.

The week contains 2 choices, GBP/USD trades higher than GBP/CHF or GBP/CHF trades lower than GBP/USD. The deciding factor is 1.1204. Correct is GBP/USD to trade at minimum 1.1079 and GBP/CHF to trade 1.0996. GBP/CHF must cross GBP/USD.

EUR/USD Weekly Trade

Last week’s EUR/USD 2nd leg as short 0.9829 to target 0.9758 achieved 0.9808 to 0.9758 or +50 pips while initial longs achieved +126 pips. Total +176 pips on EUR/USD 178 pip weekly range.

EUR/USD Long 0.9665 and 0.9661 to target 0.9772. Then Short 0.9772 to target 0.9710.
To follow the trade or take profit as desired, here’s major levels: 0.9691, 0.9708, 0.9725, 0.9742, 0.9759, 0.9776, 0.9793.

Short ranges this week as noted by EUR/USD to target at every 17 pips. The CHF cross pair alignments must rectify to allow EUR/USD and anchor pairs wider trade ranges.

The easy trades this week are short GBP/NZD, EUR/NZD, GBP/AUD, EUR/AUD.

GBP/JPY and EUR/JPY begin the week in the overbought stratosphere.

USD/CAD, USD/JPY and USD/CHF begin the week in the overbought extremes.

AUD/USD is the better trade to NZD/USD. Not only is AUD/USD massively oversold but AUD oversold matches to AUD/CHF and AUD/CAD while nothing special exists to AUD/JPY except to follow GBP/JPY and EUR/JPY lower.

Watch EUR/GBP 0.8659.

As currency markets begin the week in deep oversold and overbought, movements align as great profit opportunities.

Brian Twomey

EUR/USD weekly target at 0.9829 from 0.9678 achieved highs at 0.9807 for +129 pips. Actual target today must break 0.9817 then 0.9829.

Next week EUR/USD ranges from 0.9716 to 0.9860 and the same old weekly EUR/USD stuck in the same positions.

DXY target at 113.88 slated for next week traded yesterday at 113.95 highs. Next week’s target is located at 114.39. Future targets are located every 44 pips starting from 114.83, 115.27 and 115.72. Count 44 pips below and bottom targets are known.

EUR/USD currently trades as DXY perfect opposite as targets below are located every 44 pips. DXY 115.72 translates as EUR/USD 0.9400. Both today are located at furthest extremes. EUR averages are rising while DXY averages are falling.

JPY Cross Pairs

GBP/JPY and EUR/JPY trade at extreme overbought while nothing special exists to AUD/JPY, NZD/JPY and CAD/JPY. For GBP/JPY to normalize, target is located at 163.00’s and 162.00’s.

AUD/USD trades massively oversold and targets easily low 0.6400’s to 0.6500’s. NZD/USD exists and trades at the inclination of EUR and GBP.

Both EUR/AUD and GBP/AUD trade deeply overbought and require about 200 pips lower to trade correctly.

GBP/USD targets in the vicinity of 1.1080 and GBP/CHF to 1.0900’s. GBP/CHF trades as leader currency to AUD/CHF, CAD/CHF, EUR/CHF and NZD/CHF as nothing special exists to CHF except GBP/CHF.

EUR/CAD short next week remains the plan although a higher price would ensure a far better trade while GBP/CAD may sit last on the GBP trade rankings due to a horrible position.

USD/JPY trades overbought and ranges from 146.00’s to 148.00’s. USD/CHF trades most overbought to USD/JPY and USD/CAD.

SPX 500 at the 5 year average is located at 3367.25. SPX traded 3400 lows yesterday and dangerously close to the 5 year average. A break of the 5 year average then much lower for SPX.

EM

USD/CNY trades safely above 6.9710 . EM currencies trade fairly neutral as nothing exciting exists. USD/HUF, USD/ZAR and USD/MYR stand out as overbought while USD/RON trades neutral. USD/BRL trades neutral.
Neutral to the Bulgarian Lev, USD/BGN.

Brian Twomey

Judging by today’s price movements to currencies, stock markets and XAU/USD, the Inflation release will report as a no movement dud. If Inflation wasn’t on the docket then prices today would trade as a repeat of yesterday for a vast majority of currencies, stock markets and Gold. Required for movements is an off sync announcement.

EUR/USD today must break 0.9696 and 0.9701 to target 0.9745 then short. GBP/USD targets 1.1120 and 1.1124. GBP/USD Bottom must break 1.1028 to target 1.1008 and 0.9656 for EUR/USD.

XAU/USD solid bottoms today at 1659.97 and 1659.09 while above targets are located at 1676.67, 1678.75 and 1680.78. Bottom targets for XAU/USD must break 1669.94 and 1668.32.

GBP/USD and GBP cross pairs outperformed EUR and all currencies this week. GBP/USD and GBP cross pairs will remain big performers next week.

GBP/JPY below bottoms are located at 161.64 and 161.51. GBP/JPY topside targets 163.28 and 163.39. GBP/JPY regularly trades 2 and 300 pip days. No different for next week.

Don’t dismiss GBP/CHF as GBP/CHF trades almost pip for pip to GBP/USD. GBP/CHF bottoms today are located at 1.0987 and 1.0876 while above targets 1.1092 and 1.1099 then short.

GBP/AUD above targets 1.7722 and 1.7730 then short while bottoms are located at 1.7552 and 1.7463.

USD/CHF below targets 0.9937 and 0.9920.

EUR/USD Weekly Trade

Long from 0.9687 and 0.9678 to target 0.9829. Lows achieved 0.9669 and highs at 0.9774 for +96 pips. Target remains open.

DXY 113.53 target traded to 113.60.

Next Week

EUR/USD ranges next week from 0.9722 – 0.9679 and expected close Friday at 0.9703 for longs next week. Count every 26 and 27 pips for EUR/USD targets higher and lower.

DXY targets next week 113.88. Count every 29 pips to forecast targets to 114.00’s with a top now at 114.75. Count every 29 pips for bottom forecasts to 111.27.

Massive oversold AUD/USD must trade to minimum 0.6395. Any price below remains severely oversold and long only strategy.

NZD/USD must trade to minimum 0.5653. Same as AUD, any price below remain deeply oversold and long is the only trade.

Overbought USD/CHF, USD/CAD and USD/JPY follow overbought DXY. USD/JPY trades from 145.74 to 148.00’s while USD/CAD targets easily low 1.3700’s.

GBP/JPY higher and close just below 163.18 then short for next week. Nothing special exists to GBP/JPY except wide ranges but no significant breaks expected.

EUR/JPY targets next week low 141.00’swhile AUD/JPY trades below vital 93.16 and NZD/JPY 83.18.

Massive overbought EUR/AUD targets 1.5200’s easily from 1.5400’s.

DXY 300 pip ranges dictates movements.

SPX

From current 3500;s, the 5 year average approaches at 3300.’s and a significant break to target much lower prices.

Brian Twomey

As reported Friday, FX begins and will end the week as the exact same as last week. NZD/USD and AUD/USD starts the week deeply oversold. NZD and AUD cross pairs trade in compliance to oversold NZD/USD and AUD/USD. Weekly NZD/USD targets 0.5744 on a break of 0.5699.

AUD/USD and NZD/USD long assistance is derived from deeply overbought EUR/NZD, GBP/NZD and EUR/AUD. Best profit trades for the week for 200 pips each are EUR/NZD, GBP/NZD and EUR/AUD. GBP/AUD will follow but caution to 1.7288 as further shorts are dependent on a break lower. All contain a short only strategy for the week.

EUR/USD and GBP/USD begins the week in neutrality and the same neutral story as last week. Neutral references the price location. Price location is determined by averages. Averages are dependent to averages moving higher or lower in relation to the traded price.

An expansion or contraction to averages determines the range of prices. An expansion to averages means the price remains in the same location under wider ranges while a contraction refers to trades to break ranges yet trade in a higher or lower location.

EUR/USD began last week at 147 pip range. The actual range traded 274 pips from 0.9999 to 0.9725 or 2 X 147. EUR/USD long and short profits last week 319 pips.

Overall profit achieved higher than the actual range which means every traded pip was profit but also, EUR/USD required a range break to achieve targets.

EUR/USD 2 weeks ago and 319 pip range to 148 pip profit as ranges expanded to miss extra profit pips above and slight miss to entry below.

Overall ranges decide questions to neutral, oversold and overbought.

DXY Vs EURUSD

DXY Monday targets 113.12 and 113.53 for the week. Targets higher for future weeks is derived from counting 70 pips from 113.53 as 114.23, 114.93, and 115.63.

EUR/USD as DXY perfect opposite targets weekly 0.9657. Lower targets for future weeks is derived by counting every 69 pips from 0.9657 as 0.9588, 0.9520 and 0.9451.

DXY at the 112.75 weekly open trades 1600 pips above the 50 year average at 96.00 while EUR/USD trades 1600 pips below the 5 year average at 1.1400’s.

DXY economic news will eventually trade against rate rises and DXY will drop. As perfect opposite EUR/USD and Europe economic news will strengthen and EUR/USD will rise. Currently, both Europe and the United States run trade deficits at -42 billion and -62 billion.

EUR/USD Weekly Trade

EUR/USD range this week trades 142 pips from 0.9758 to 0.9616.
Long 0.9687 and 0.9678 to target 0.9829. Short 0.9829 to target 0.9758. The long trade proposes 151 pips from 0.9678.

Short 0.9829 to target 0.9758 or 71 downside pips for a total 222 pips on a possible 284 pip range.

EUR Cross Pairs

EUR/CHF holds support to EUR/USD and EUR/CHF at 0.9602 while 1.3350 decides EUR/CAD.

USD/JPY and JPY Cross Pairs

USD/JPY trades overbought this week and ranges from 145 to 147.00’s. JPY Cross Pairs trade oversold and NZD/JPY leads the way higher. GBP/JPY breaks 161.64 then higher goes JPY cross pairs. Least favored is CAD/JPY.

Trade Rankings

EUR/USD, AUD/USD, EUR/AUD, NZD/USD, NZD/JPY, USD/CAD, EUR/NZD, AUD/CHF, NZD/CHF, CAD/CHF, USD/JPY, AUD/JPY, EUR/JPY, CAD/JPY, EUR/CAD.

Best trades this week: EUR/USD, AUD/USD, EUR/AUD, NZD/USD, NZD/JPY, USD/CAD, EUR/NZD, AUD/CHF, NZD/CHF, CAD/CHF.

GBP Trade Rankings

GBP/NZD, GBP/USD, GBP/AUD, GBP/JPY, GBP/CHF, GBP/CAD.

USD/CAD and USD/CHF trade severely overbought while USD/JPY trades within the confines of DXY.

Brian Twomey

FX next week resembles set ups from last week. AUD/USD and AUD/CHF begin the week deeply oversold to match massive oversold NZD/USD and NZD/CHF. The wildcard is neutrality to EUR/USD and GBP/USD.

EUR/USD close in the vicinity of 0.9761 offers good shorts to target easily 0.9904. Below 0.9761 proposes the same longs only for more profit pips.

GBP/USD close at 1.1105 offers a reasonable entry to target 1.1300’s. GBP/CHF close at 1.0900’s ensures GBP/USD target to 1.1300’s as GBP/CHF and CHF performs market function as support currencies.

USD/CAD and USD/CHF begin the week overbought. Higher today based on NFP ensures more profit pips for shorts. DXY traded 250 pips this week to Comatose USD/JPY at 120.

DXY next target above for next week is located at 113.16 then the big weekly short. USD/JPY offers 144.99 to 147.00’s next week or shorts to 142.00. Against current overbought DXY then USD/JPY short is the best trade to also match overbought counterparts USD/CAD and USD/CHF.

USD/CAD is the better profit trade for next week particularly as USD/CAD approaches 1.4600 highs last seen in 2020, 2016 and 2003.

GBP/JPY 161.57 decides its fate for next week. Required for GBP/JPY is to gain traction today from 161.57 or GBP/JPY relegates to last position in the GBP trade rankings.
AUD/JPY and NZD/JPY oversold and long for next week is the same story as last week. EUR/JPY and CAD/JPY trade above 139.71 and 104.90.

Overall, JPY cross pairs lack uniformity as leader GBP/JPY offers no direction.
EUR/NZD and GBP/NZD trade massive overbought and offers easy shorts for next week. Same story existed this week. EUR/NZD is the preferred trade.

Massive overbought EUR/AUD offers easy shorts for next week while GBP/AUD trades fairly neutral. EUR/AUD is not only the better trade but becomes the leader currency to GBP/AUD.

Unless EUR/CAD and GBP/CAD gain significant movements today then nothing special exists to trades for next week. GBP/CAD trades below 1.5414 while EUR/CAD trades above 1.3347. AUD/CAD trades massive oversold and may become the better trade for next week to match oversold AUD/USD and AUD/CHF.

Overall, same wide range movements are expected next week as currency pairs lack uniformity and must realign.

Brian Twomey Contact [email protected]

EUR/USD achieved target at 0.9979 for +226 pips. The Trade: Long 0.9749 and 0.9744 to target 0.9979. Lows traded to 0.9752 and highs at 0.9999.

The 2ng leg in in effect to short 0.9979 to target 0.9886 for another 93 pips.
SPX Trade: Long above 3661.targets 3759.79. Highs achieved 3790 and lows 3606. Bottom side from Sunday 3562.90. From 3661 + 98 pips.
Not posted was short from 3759 for extra points.
Target to Target from 3606 lows to 3759 is the actual required trade for 153 points.
DXY weekly traded 179 pips vs SPX 184. SPX for the week trades in unison to DXY.
No winner emerged in the Brazillian elections Sunday as a runoff is scheduled for October 30 and another Sunday of voting.

USD/BRL target at 5.2683 reached destination Monday from severe overbought at 5.4235 and +1500 pips.

USD/BRL higher must break 5.2192 and targets easily 5.2665 on a long only strategy from current oversold.

EUR/USD at current 0.9924 approaches vital 1.0048 to trade substantially higher and target 1.0123 and 1.0198 easily. EUR/USD 1.0048 is a huge break. The line is currently rising which says ranges may open wide but 1.0048 won’t break easily.

GBP/USD must break 1.1602 to trade higher and weekly highs traded to 1.1493. The short target is located at 1.1070 on a break of 1.1336.

Vast majority of trading activity this week was contained between GBP/USD and EUR/USD and cross pairs. EUR/USD and GBP/USD began the week at dead neutral to oversold AUD/USD and NZD/USD. EUR/USD and GBP/USD movements were based on proper alignments to AUD and NZD.

USD/JPY traded 179 pips this week to match DXY. USD/JPY is again trading perfectly to DXY.

Japan’s Ministry of Finance released its monthly Intervention data as right about $14 million was spent to drop USD/JPY 500 pips and JPY/USD to trade higher by 250 pips. The $14 million translates as Yen 2,838.2 billion.

Best trades to continue the week are EUR/NZD, EUR/AUD, GBP/AUD and GBP/JPY. Recall GBP/JPY ranges from 148.00’s to 168.00’s. GBP/JPY broke the 5 year average in 2019 to trade 3 years later at 168.00’s in March 2022. The range from 148 to 168 remains in effect until a break is seen and has held for 3 years.

GBP/JPY trades massive overbought and targets easily 163.21 then 162.54.

EUR/NZD, EUR/AUD and GBP/AUD trade massive overbought and easy money shorts over next days. Note exchange rate numbers EUR/NZD 1.7300’s VS GBP/AUD at 1.7600’s. Same currencies as both achieved a marriage for double trades.

NZD/USD and AUD/USD traded higher to relieve deep oversold then sat idle to allow GBP/USD, EUR/USD and cross pairs to align again to AUD/USD and NZD/USD.

WTI and Brent traded 3.56 points yesterday and 3.72 points for the week. Nothing extraordinary to WTI or Brent as both trade perfectly normal.

XAU/USD upside target today 1734 then short to 1690.61.

Brian Twomey

DXY continues to dictate currency and all market prices. The rise to 114.00’s offers vital average supports every 100 pips from 113.00 to 89.00’s. DXY closed at 112.17 and trades between 113.15 above and 112.10 below. Ranges trade roughly 100 pip intervals from the vital average to 100 pip targets above.

Next targets above are located at 115.50, 116.27, 117.04, 117.81 or every 77 pips.

Downside targets begin at 110.90, 110.13, 109.36, 108.60 or every 77 pips.

Downside targets assume an average break then trade between 2 most vital averages.
DXY trades 57 pips per day. DXY at 57 pips per day has been a constant within DXY’s history since at least 2016. The Fed may raise or lower interest rates to any desired level and DXY will remain constant at 57 pips per day. At 57 pips per day is enough to hold Commodities and SPX from trading to massively exorbitant levels.

The range reported to SPX performs exactly as DXY dictates to points per day. Gold best days trade 20 and 30 points and 50 to 80 point weeks while WTI and Brent trades its best weeks at 6 and 8 point ranges and 2 to 4 point days.

Not constant for Fed interest rate changes are every currency, stock market index and associated financial instrument on the planet as all must massively adjust pips per day and weekly ranges.

GBP/USD at 56 pips per day is the best currency to hold constant to DXY, followed by EUR/USD at 49 while AUD/USD at 32 and NZD/USD at 28 suffer the effects to allowable pip movements.

The overall constant to currencies and markets is an award winning simple math and Statistics book never written.

Overall markets are dependent on DXY for every move.

The Week

USD/CAD and USD/CHF begin the week overbought while USD/JPY trades in ranges as DXY from 144.36 to 147.10.

Currency markets problem this week is lack of uniformity among anchor and cross pairs.

AUD/USD and NZD/USD trade deeply oversold to fairly neutral EUR/USD and GBP/USD.

EUR/CAD trades deeply overbought to neutral GBP/CAD and oversold AUD/CAD and NZD/CAD.

EUR/JPY trades deep overbought to massively oversold NZD/JPY, Neutral CAD/JPY, and Neutral AUD/JPY. Nothing special exists to GBP/JPY however watch 160.63 break lower to take down all JPY cross pairs.

AUD/CHF, CAD/CHF and NZD/CHF trade oversold to neutral EUR/CHF and GBP/CHF.
Overbought EUR/AUD to neutral GBP/AUD.

GBP/NZD and EUR/NZD aligned as both overbought.

As GBP/USD and GBP cross pairs begin the week at neutral, EUR/USD and EUR cross pairs must lead the way to all categories of cross pairs.

EUR/USD

EUR/USD last week achieved 0.9782 target. This week’s trade runs as: Long 0.9749 and 0.9744 to target 0.9979. Then short 0.9979 to target 0.9886. Higher for EUR/USD must break 1.0057

Trade Rankings

EUR/USD, AUD/USD, EUR/AUD, EUR/CAD, EUR/NZD, USD/CAD, NZD/USD, EUR/JPY, AUD/JPY, NZD/JPY, AUD/CHF, NZD/CHF, CAD/CHF, USD/JPY, CAD/JPY.

Least favored JPY cross pair is CAD/JPY then AUD/JPY. GBP/USD shorts are favored as well as GBP cross pairs however with deep caution.

SPX Weekly Trade

Long above 3661.targets 3759.79 and bottom side target 3562. 90.

Brian Twomey