Author: twbrian

Last week the BOJ informed USD/JPY ranges would trade 201 pips. Broken down, 100.5, 50.25, 25.12, 12.56, 6.28. 3.14. Add 3.14 to 6.28 = 9.42.

USD/JPY day trade pips today = 73 pips = 36.5, 18.25, 9.12.

Yesterday 72 pips = 36, 18, 9.

USD/JPY 73 pip Upside levels today: 144.82, 144.91, 145.00, 145.09, 145.18, 145.27, 145.36, 145.46

USD/JPY trades day trades every 9 pips. The BOJ informed last Friday, day trades would run every 9 pips.

EUR/USD Upside levels today and practically every day at 55 pips = 27, 13, 6.5.

1.1002, 1.1009, 1.1016, 1.1023, 1.1030, 1.1037, 1.1044, 1.1051.

EUR/USD every 7 pips V USD/JPY every 9 and 2 pip differential. This is pretty much a permanent trade condition.

EUR/JPY today 80 day trade pips = 40, 20, 10. Normally 79 pips = 39.5, 19.75, 9.87

EUR/JPY Upside levels today = 159.25, 159.35, 159.45, 159.55, 159.65, 159.75, 159.85, 159.95.

EUR/USD Every 7 pips, USD/JPY every 9 pips, EUR/JPY every 10 or 9 pips. EUR/USD Differential Vs EUR/JPY = 2 or 3 pips. And fairly permanent trade condition.

The ECB in 2016 imposed Day trades to run from 2:30 am EST to 10:00 am EST. BOJ releases vital trade information at 4 ish am. My factor to USD/JPY and day trades is actually better than the BOJ as we are already trading 4 am BOJ trade information at 2:30 am.

Best trades for profit from allowable movements: EUR/JPY, USD/JPY, EUR/USD.

As the BOJ releases trade information, next post will look at ranges and pip differentials for USD/JPY, EUR/USD and EUR/JPY.

Brian Twomey

The BOJ released Producer Prices today and the number is positive 0.1 from -0.1. As written, the range was 0.3 and producer prices reported expected results within range. Higher Producer prices will elevate exports for next months report.

Exports at 0.1 Vs Imports at -0.3 is closely balanced on a Yen basis and no reason for BOJ intervention. We will hear the wrong forecasts and usual drumbeats of intervention next week.

To understand the BOJ, they monitor extremely close USD/JPY, EUR/JPY and EUR/USD as largest export markets.

DXY remains in a trap to tiny ranges and DXY traded overbought all week. Overbought DXY explains ultra highs to USD/JPY, JPY cross pairs, EUR/AUD, GBP/AUD, GBP/NZD, EUR/NZD, USD/CAD. All are affected by DXY because all are DXY under a different name and number.

DXY traded 73 pips this week to 90 ish for EUR/USD. USD/JPY traded 260 pips to DXY 73. USD/JPY traded 3.5 pips to DXY and EUR/USD.

The BOJ automatically sets daily a 2 pip differential for USD/JPY to DXY and EUR/USD. The BOJ sets a 4 pip differential to EUR/JPY.

From the BOJ and recorded on my site, the BOJ set USD/JPY’s daily range at 201 pips Today’s range at 201 pips, 144.24 – 142.23.

Friday’s range at 193 pips trades from 144.20 to 142.27. Such analysis.
DXY tiny ranges are killing movements to AUD/USD, USD/CAD, NZD/USD and EUR/USD.

DXY next week trades the same 4 week range from overbought at high 102.00’s and low 103.00’s to oversold 101.00’s. A range at this capacity is a license for USD/JPY to trade freely in wide ranges.

EUR/USD next week trades dead from 1.0941 to 1.1052. The big line for higher and lower is located at 1.0964.

GBP/USD trades from 1.2657 and 1.2672 to overbought 1.2873.

Massively overbought EUR/AUD, GBP/AUD, EUR/NZD and GBP/NZD. Overbought to GBP/CAD and EUR/CAD.

USD/CZK target at 21.9248 and 21.8930 traded to lows at 22.0004 so far from high Tuesday at 22.2220.

G10 currencies contain 28 pairs and barely 14 currencies are worth the trade effort. The central banks are severely killing off market movements.

Brian Twomey

What is monetary policy and the contributing factors is answered by no difference exists to monetary policy as each central bank is an exact replication to each other. Each central bank calculates economic releases in the exact same manner with the same contributing inputs.
The results across every central bank is the exact same for every central bank across the world. The numbers to economic reports maybe slightly different from central bank to central bank but economic categories and conclusions are the exact same.
Every central bank contains high Inflation, High domestic prices, High Import prices, low exports, low Producer Prices, raise interest rates, labor shortages, Wage problems, low GDP.
Every 10 year to 3M yield spreads are inverted except Japan to warn of recession ahead.
How did we arrive at a one world economic concentration where every economic release is the same across small and large economies. How does small economies of New Zealand, Australia and Japan match Inflation, producer prices, Imports, GDP and Wage problems as Europe and the United States.
Economic forecasts from central bank to central bank for 2023 and 2024 reads as one world economic concentration. Every central bank informs Lower Inflation, Lower Interest rates, GDP at depression era 1%, lower import prices, higher exports, higher producer prices.
Read one central bank report is the same as reading all economic releases and forecasts for every central bank.
How can markets trade and exists under one world economic convergence when financial instruments are derived and invented to trade from a divergence of movements based on economic releases. Markets are stagnant and completely dead due to one world economic compression.
Economic releases and interest rate changes lack any impact to market prices. Tomorrow’s CPI release lower or higher will inform to all central bank CPI direction. If CPI reports lower then all central bank CPI releases will report reductions.
The commonality to currency prices for EUR/USD from January is a 700 pip range in 7 months or 100 pips per month and 50 pips per week. Are market prices a reflection of one world economics and lack ability to move, are market prices so off kilter to economics and abandoned the principle to follow and price economics correctly.

The speculation to how economies arrived at concentrations is derived from Trade and prices as trade and prices is the commonality across all large and small economies. What is traded nation to nation is unknown so the question is the distribution of good and services balanced and priced correctly.
The good side commonality is the manufactured imports required for each nation such as Copper, Steel, Machinery, textiles, chemicals, oil.
Higher import prices for all nations led to a higher cost and imported inflation across all economies. What if the category of healthcare rose for CPI but the reason was the import to a specialized heart machine. As the cost to the import rose so must the wages and capital involved to consume, transport and apply the machine. The ripple effects across an economy is staggering to economics as the price level must maintain the balance.
The chart below is representative to every nations import prices only to a greater steepener

GDP as the BOJ states makes up 60% of consumption. Trade has the ability to obliterate consumption and cause a contagion effect throughout an economy. CPI and GDP are vital to an economy but minor in relation to the domino reverberations of trade.
The commonality to all nations is the steady trend line rise to import prices from 2021 to 2022. yet high inflation is answered by the raise to interest rates and without resolution to a lower CPI after 10 raises and 2 years by the Fed. GDP dropped from 5% in 2021 to 1% for 2023 yet Import prices remain severely elevated.

For simplicity, the GDP price deflator is factored by division of the GDP index value by real dollar GDP. The GDP Price deflator excludes imports. Unit labor costs measures units of output to wages and answers the question to productivity as how many goods are produced per hour of labor.
The BOJ found in the July 2023 Outlook report, Unit labor costs skyrocketed in the United States as a result to large wage increases to attract labor while Europe unit labor costs rose due to firms increase of profit margins. Japan’s Unit Labor costs is blamed strictly on high import prices.
The Fed’s 2 year journey to lower Inflation not only failed and forced all nations down the same road of failure but the focus to lower CPI correctly and much quicker was never addressed.

Brian Twomey

EUR/USD Closed Friday at 1.1007. Note 2nd level at 1.1001.

1.0978

1.001

Here 1.1007

1.1045

1.1092

EUR/USD Closed Friday July 28 at 1.1012. Note the 1st Level 1.1010

1.1010

Here 1.1012

1.1041

1.1102

1.1164

Level changed but positions remained the same.

USD/JPY

Close Friday 141.68

140.40

141.02

Here 141.68

142.26

143.50

Close July 28 at 141.14

139.61

140.14

Here 141.14 Same Exact position as last week.

141.21

142.28

GBP/USD Same story, same position. If one currency is affected by a certain position then all fall into the same range. Trades are based on positions as much as the levels.

Brian Twomey

For the next 24 hours: Range 144.08 to 142.07 and the same 201 pips for Monday, Tuesday and Wednesday. Trade by interest rates, accomplished in minutes by Pen, paper and calculator. Professional trader or expert? No, its a matter to know what the heck ya doing and this lacks in our modern day.

Brian Twomey

Do we need the BOJ. Nope

Today 7 hour

USD/JPY

Long Short Line 143.07

Most Important 142.44 and 142.97 Vs 143.16, 143.25, 143.34, 143.43, 143.61, 143.70, 143.79

Bottom 142.35 achieves by 142.53 and 142.71

Upper Target 143.79

Continuation Fail 143.43 

24 Hour

Slight off on the topside but this is most profitable for shorts as USD/JPY exceeded 142.74. Normally USD/JPY works like clockwork

USD/JPY

Long above 142.04 to target 142.74. Levels: 142.17, 142.31, 142.44, 142.58, 142.71, 142.85

Short 142.74 to target 142.58

Short below 142.04 to target 141.33. Levels: 141.91, 141.78, 141.64, 141.51, 141.37

Long 141.33 to target 141.50

Target to Target: 142.74 and 141.33

Brian Twomey

EUR/USD Vs USD/JPY extremely long term: EUR/USD 1.4656 Vs USD/JPY 106.57.

For USD/JPY, the BOJ says 156.11 and 130.12 and 154.08 to 131.84. The daily numbers presented here may change by 100 ish pips. For example, Monday 155.65 to 129.74.

I created an interest rate model in 2015 /2016 and the model is able to trade every currency and every financial instrument on God’s planet for the vital 7 1/2 hours of trading. To include USD/JPY. From the 7 hour interest rate model came the 24 hour trade. Both models including weekly trades is able to trade multiple longs and shorts.

Drill this vital point in your head. An exchange rate = interest rate and interest rate = exchange rate. Nothing else matters as an exchange rate can’t move without an interest rate and interest rate can’t move without an exchange rate. The BOJ and USD/JPY is the prime example but it applies to every nation’s interest and exchange rates.

The laugh to all this is my models are miles ahead of these central banks interest and exchange rates including the BOJ and USD/JPY but because the BOJ is vastly different than any central bank, I began an inspection to determine what the BOJ was doing.

From the weekly, USD/JPY 143.00’s to 141.00’s Vs actual 143.50 to 140.14.

Tona rates were released at 8:00 PM EST Monday evening Vs the BOJ Fix to USD/JPY and USD/JPY moved higher by 50 pips. Yet Tona wasn’t the trigger to force the move.

The 4 am EST release of the BOJ Call rates is the most vital and profitable trade rates. Tona rates are based on Call rates and are pretty much the exact same rates as Call rates. I term Tona the reinforcement rate.

The BOJ Monday informed this for highs: 143.53, 143.45, 143.44. Today’s Tuesday at 8:00 PM EST, USD/JPY dead stopped at 143.43. Tona informed highs at 143.49 and 143.47.

Lows and highs for Tona and Call rates = 143.53 Vs 141.52. Monday trade = 143.11 to 141.10. The point of note is 201 pip range.

Tona rates are vital due to the longer term view. Call rates = 154.08 to 131.84 Vs Tona 148.22 to 137.05.

USD/JPY 2 pip differential is automatically built into the system by the BOJ Fix as USD/JPY trades 2 pips to JPY/USD and 2 pips to EUR/USD. USD/JPY is the middle currency but most vital to the BOJ and seen in many Economic releases such as the Import / Export Index.

The word of caution to the false promise to profits and movements to US Yields Vs USD/JPY. I have another system to show this in detail.

Today is Tuesday and Wednesday is covered to highs and lows. At 4 am EST, slight adjustments to USD/JPY highs and lows is the only requirement.

Brian Twomey

EUR/USD 1.1089 Vs DXY 101.20

EUR/USD 1.1129 Vs DXY 100.80

EUR/USD 1.1210 V DXY 99.99

EUR/USD 1.1412 V DXY 97.98

EUR/USD 1.1613 Vs 95.96

EUR/USD 1.1815 V DXY 93.94

GBP/USD Vs USD/CAD

GBP/USD 1.3442 Vs USD/CAD 1.2683

GBP/USD 1.3474 Vs USD/CAD 1.2651

GBP/USD 1.3537 Vs USD/CAD 1.2588

GBP/USD 1.3696 Vs USD/CAD 1.2430

GBP/USD 1.3854 Vs USD/CAD 1.2271

GBP/USD 1.4012 Vs USD/CAD 1.2113

Brian Twomey

As the walk through the BOJ continues, the reports, assessments and methodologies is pretty much the same for all central banks. Today’s BOJ to Producer Prices is the same number for all central banks. The BOJ and RBNZ charts to CPI and Imports Vs Exports reveals no difference. Posted side by side without the formal name, no difference exists nor can we say, this chart is BOJ and the other chart, RBNZ.

All central banks are dealing with high Inflation rates and all target 2%. GDP is low for all central banks. Most 10 to 3M bond spreads are negative. All central banks raised interest rates. All central banks labor supply is short. All central banks wages are low and under Inflation rates. All central banks unemployment rates rose and numbers are the same. All central banks Household Spending slowed. All central banks housing starts and purchases dropped.

If a recession hits then every nation in the world will experience recession as all the calculated economics is the exact same nation to nation.

Talk about one world government and no wonder why the rise of political authoritarians. Authoritarians always gain power under economic depressions, Hitler, Mao, Stalin, Hirohito in Japan, Obama and Biden. My favorite was Robert Mugabe of Zimbabwe.

The original point of note was to highlight if the BOJ for example was understood then the deep insights to all central banks are known.

Producer Prices

Most vital to producer prices is monthly index values because monthly adjustments hardly change but to know index values allows for monthly forecasts.

Here’s Index values for May and June 2022.

May = 106.80, June = 107.10. A difference of 0.3. The monthly release was 0.3.

June = 107.10, July = 107.30, a difference of 0.2. Reported Monthly change 0.2.

The methodology is find the difference between the previous 2 Index values and the range to producer prices is known. The yearly change is reflected in the monthly releases. If 0.2 is reported then the yearly value changes by 0.2.

Brian Twomey

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

30, 90 and 180 day Tona charts and the best public view available but also the best that may ever be seen.

Correct = 30 day in red trades above Blue 90 and 90 day trades above Green 180 day. The 30 day is descending while 90 day Blue is rising. As Shinici highlighted in the August 2nd speech, the BOJ controls short term interest rates and won’t allow the 30 and 90 day crossover as the consequences for USD/JPY is enormous in big movement terms. The BOJ will come to the USD/JPY rescue in order for USD/JPY to trade 200 pip weekly ranges and trade lower on a slow gradual basis.

Brian Twomey

The BOJ’s release of the PPI Index occurs Saturday on the 12th and the question will the BOJ disclose Japan’s most vital source of information Friday, the 11th.

The Import side of the Index was not only positive for all 2022 but Imports surpassed Exports by 5 X and 10 X on a Yen and Contract currency basis based on monthly and yearly changes. The massive adjustment lower from persistent highs began in November 2022 however Imports ran 2 X to Exports. Imports fairly normalized to Exports in February and March 2023 yet Imports remained higher.

Japan’s June 3.3% Inflation rate derived from Imported Inflation due to the high cost to imports and the many ancillary factors associated with high Inflation Rates. Inflation is a deeply lagging indicator but if the puzzle pieces are combined, Inflation rates are seen in advance.

The first component was USD/JPY skyrocketed from 114.00 to 146.00’s and rose alongside DXY. JPY/USD was cheaper but entailed a higher cost for Imports and enough to harm and surpass the export side. A fine line exists to the Exchange rate vs Imports and Exports as all must balance to contain and normalize Inflation.

WTI as a vital Import to Japan rose from 70.00’s to 130.00’s for 2022, Copper and Steel rose for all 2022, Soybeans as an insatiable consumer good for Japan and Asians, rose for all 2022. Semi Conductor prices rose for all 2022. Electronics, Metals, Textiles and Lumber rose for all 2022.

Producer Prices for all 2022 were extraordinarily high and peaked in December 2022 as the cost of goods to manufacture for exports suffered substantially. Imports for December 2022 ran 2 X to Producer Prices on a yearly basis and 5 X to imports from May to October 2022.

May and June 2023 began a fairly normalized relationship between Producer Prices and Imports to Exports. On a balanced relationship as is the current alignment, the BOJ correctly forecasts a lower Inflation rate for all 2023.

USD/JPY at 141.00’s is fairly in line with BOJ estimates. A lower Inflation rate and lower import prices would see the Export side rise substantially above Imports.

Powell and the Fed offered nations higher prices, interest rate rises and Imported Inflation as all nations suffered higher Interest and Inflation Rates.

The question to BOJ interest rate changes occurs only if Inflation remains persistently high and this is not seen. From Shinici speech August 2nd, the YCC bands expanded in December 2022 due to high Inflation rates and higher rates expected. YCC band expansion derived to contain Japan’s Inflation rates.

Brian Twomey

Yesterday 24 hour Trade sent and traded yesterday at 4:00 pm EST

Short below 142.96 to target 141.86. Levels: 142.74, 142.52, 142.30, 142.08, 141.86

Long 141.86 to target 142.05

Lows today 141.83, Highs 142.89

Vs BOJ

Bottom 141.63

BOJ 142.49 and 142.78 included in the 24 Hour trade from yesterday as well as today’s 7 hour trade.

Brian Twomey

7 Hour Day Trade Today Vs BOJ Levels.

Upside 142.49, 142.58, 142.67, 142.76, 142.94, 143.03, 143.12

Bottom 141.68 achieves by 141.86, 142.04, 142.33

Upper Target 143.12

Continuation Fail 142.76

Lows today so far 141.95, Highs 142.90

Vs BOJ

BOJ short term Range for USD/JPY 141.63 to 143.64. and 2 vital Points: 142.78 and 142.49

Brian Twomey

The BOJ offers short and long term exchange rate levels. TONA is the new JPY Tibor and employed as the new Swap Rate for 30, 90 and 180 days. Most vital for Swap purposes is 30 and 90 day.

BOJ short term for USD/JPY 141.63 to 143.64. Levels are derived from USD/JPY market rates to BOJ market rates. Never recommended because market rates are never correct. For example, Statistics says 142.22 minimum target while BOJ has 142.78 and 142.49. The BOJ most probably intends 142.78 and 142.49 as vital break points rather than targets.

Overall, the BOJ is reliable for trade purposes as traders won’t ever lose money.

High side and very long term, 156.23, 153.70, 150.73, 149.34, 148.16. Massive overbought USD/JPY won’t see such exchange rates trade.

Low side below 141.63 as follows: 137.31, 136.23, 134.98, 132.36, 130.23.

Brian Twomey

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

Volume

Above: Average, high and Low

Overnight Collateralized

Rates of transactions settled
on the same day as the trade
date and maturing the
following business day in the
collateralized call money
market

Overnight Uncollaterialized

Rates of transactions settled
on the same day as the trade
date and maturing the
following business day in the
uncollateralized call money
market.

Overnight Tona Rates

As at 2023/08/02 10:21 JST

Brian Twomey

Is Tona the same as TORF. This 10 am Tokyo and 8:00 pm EST rate is the first USD/JPY fix for every Japanese trading day. Rates trade from 8 pm est to 4 am est then the next set of interest rates are released.

To obtain Tona rates, must go through the BOJ or pay Quick Corp much money.

EURYO Yen Tibor appears to be on the discontinuation list for publication and use for markets.

The BOJ will never change headline interest rates because tiny movements in BOJ and Interest rate numbers massively changes the entire Japanese system and exchange rates. Also, the YCC bands maintain 0.5 to 1.5.

1m = 0.9466

3m = 0.94406

8 m = 0.9550

Total Interest rates

1.001

0.9550

0.9466

0.94406

0.939

0.913.

What we have is a break down to factor USD/JPY miles ahead and far better than normal 4 am rates.

Tokyo Term Risk Free Rate (TORF)

TORF

(Unit:%)

As at 2023/08/01 17:00 JST

Historical TORF

Brian Twomey

The YCC bands remain at the primary 1.5 to 0.5 vantage points above and below the 10Y to 3m yields. The BOJ’s words were flexible yet rigid to the 10 year. The 10 year yield at 1.5 held inside the bands since 2015 / 2016 implementation but today broke above for the first time by trading to 0.563 or 1.563.

For next week, the JGB 10 year contains easy ability to trade to 0.5964 and 0.6051 to test the BOJ resolve to flexible yet rigid. Inside the upper 1.5 band, the 10 year must trade to 0.50 at minimum but currently big break lines exist at 0.4920 and 0.45.

The lower side to the band at 0.5 is not the issue due to the impossibility to break as BOJ 0.9 interest rates won’t break below anytime soon. The bottom 0.5 side held easily since 2016 implementation to YCC due to the position of BOJ interest rates.

A break of the bottom band at 0.5 requires a BOJ interest rate change lower from 0.9 and any speculation to an interest rate change by the BOJ won’t happen anytime soon as the present Japanese financial system operates perfectly.

The YCC bands in relation to USD/JPY factors as 211.71 vs 94.09 and 282.28 Vs 70.57. USD/JPY then averages to 152.90 and 176.42. The 300 pip move for USD/JPY derived from the 1.5 side of the YCC band at 211.71 Vs 94.09.

The overall context to YCC as fairly irrelevant to USD/JPY is understood from the current JGB yield curve from 3 month to 10 year. USD/JPY as average prices: 141.15, 141.76, 141.84, 142.65, 142.82, 147.45, 155.78.

The Week

USD/CAD long term trades from 1.3110 and 1.3171 to 1.3300 and 1.3325. USD/CAD for the past 7 weeks traded within the 1.3000 – 1.3300 range and this range will hold for weeks to come. A break of 1.3110 places USD/CAD in a 251 pip range from 1.2859 to 1.3110.

USD/CAD’s trade strategy over next months is short the highs near 1.3300’s and long bottom as range trades is the only strategy available.

EUR/USD supports below are located at 1.0969, 1.0972 and 1.0979. The strategy for the week is long to target 1.1109 and just prior to vital 1.1131. EUR/USD overall range is located from 1.0979 to 1.1131. The wider range is located at 1.0972, 1.1131, 1.1353 and 1.1598.

DXY again for week 2 is trapped between low 101.00’s and overbought at low 102.00’s. DXY caught between averages is enough for markets to range trade next week and hold up progress to break vital levels.

EUR/USD Vs DXY

EUR/USD 1.1096 Vs DXY 100.86
EUR/USD 1.1138 Vs 100.44
EUR/USD 1.1223 Vs 99.60

GBP/USD higher must break 1.2879. GBP/USD ranges from 1.2702, 1.2762 and 1.2879 to 1.2923. GBP/USD overbought for the week begins above 1.2923 amd short is the only strategy.

EUR/AUD and GBP/AUD

Both EUR/AUD and GBP/AUD begin the week deeply overbought and entries are located Anywhere to target EUR/AUD 1.6469 and 1.6379 on a break of 1.6469. Longer term EUR/AUD targets 1.6076 on a break of 1.6288. GBP/AUD targets easily 1.9169 then 1.9007.

USD/JPY targets a break at 141.21 then 140.14. USD/JPY’s big break for lower is located at 139.07.

EUR/JPY targets 154.64 and 152.71 must cross lower to trade 150.00’s.
GBP/JPY targets 179.50 and 176.71 is required for much lower prices. The line up for monthly averages trades between the 34 to 38 year averages from 176.61, 178.02, 179.57, 181.07 and 184.14.

The overall trade strategy for USD/JPY and JPY cross remains short until USD/JPY trades 131.00’s and 128.00’s.

GBP/NZD and EUR/NZD

Both GBP/NZD and EUR/NZD trade massive overbought for the week as shorts is the only strategy. GBP/NZD must trade to minimum 2.0687 from 2.0865 then the next big line at 2.0512. GBP/NZD longer term targets 2.0240 and 2.0014.

EUR/NZD for the week targets easily 1.7761 then 1.7707.

GBP/CAD next vital line above is located t 1.7098 and shorts target 1.6968. GBP/CAD’s overall range is located from 1.7098 to 1.6961 and 1.6860.

EUR/CAD for the week is not favored. The vital break is located at 1.4600 to target 1.4659.

AUD/USD remains inside 0.6741 to 0.6905 and no changes over many weeks. AUD/USD trades deeply oversold and targets easily 0.6823 and 0.6848. Overbought EUR/AUD is strangling AUD/USD ranges. EUR/AUD must trade lower to assist wider ranges to AUD/USD.

NZD/USD trades against massive range problems and troubled by the same situation as AUD/USD. Overbought EUR/NZD poses the main range dilemma. EUR/NZD must trade lower to open wider ranges for NZD/USD. NZD/USD big break for higher is located at 0.6221. Long only trade strategy applies to NZD/USD and AUD/USD.

Brian Twomey

EUR/USD Vs DXY short and long term. The direction for EUR/USD is higher and lower for DXY to include all USD currencies and USD/EM.

EUR/USD 1.1096 Vs DXY 100.86

EUR/USD 1.1138 Vs 100.44

EUR/USD 1.1223 Vs 99.60

EUR/USD 1.1433 Vs 97.49

EUR/USD 1.1644 Vs DXY 95.39

EUR/USD 1.1854 Vs DXY 93.28.

Brian Twomey Contact [email protected]