EUR/USD V USD/JPY And G10: Levels, Ranges, Targets

From Last week’s written line – up: EUR/USD traded 167 pips from 1.1507 to 1.1674, GBP/USD 210 pips from 1.3105 to 1.3315, USD/JPY 120 pips from 110.75 to 109.55, AUD/USD 94 pips from 0.7348 to 0.7442, USD/CAD 222 pips from 1.3159 to 1.3381 and GBP/CAD 349 pips from 1.7423 to 1.7772.

EUR/USD vs common currency market themes at 50 to 150 pips traded last week 167 pips and 262 in the prior week, USD/CAD traded 222 last week vs 252 pips 2 weeks ago, AUD/USD traded last week 94 pips Vs 183 pips 2 weeks ago. GBP traded 210 pips last week Vs 234 pips 2 weeks ago.

EUR/USD again remains a long only strategy as the weekly target is now 1.1806. Higher to target 1.1940 and 1.1942 must break 1.1824. To 1.1806 target must break 1.1645, 1.1660, 1.1671, 1.1683 then to 1.1710, 1.1747, 1.1763 and 1.1784. Watch for longs below 1.1635.

USD/JPY target this week is located at 109.15 and 108.99 on a break of 109.74. Watch the cluster of supports at 109.64, 109.62 and 109.60 to clear then on to 108.99. Above sell points 110.02, 110.21, 110.32 and 110.68.

GBP/USD. As the Fed now holds interest rates at 2.00 and BOE at 0.50, the BOE by osmosis will be forced to raise and a raise means GBP far higher. Last week’s mention to GBP’s off kilter relationship to its pertinent averages was the explanation to the violent upswing to the 6 -3 BOE decision.

Higher for GBP must break 1.3464 to target 1.3593 and 1.3652 then on to 1.3800’s. Target this week on a long only strategy is located at 1.3367 and 1.3383. Below long points begin at 1.3270, 1.3262 and 1.3253.

AUD/USD break point for higher is located at 0.7565 to target 0.7600’s and 0.7700’s. A break at 0.7532 is required to then lead the way to a break at 0.7565. Target remains the same as last week, 0.7550’s and longs below 0.7450’s.

AUD maintains the same relationship to its averages as does GBP. The averages remain severely off kilter. Both AUD and GBP remain deeply oversold.

USD/CAD’s deeply overbought condition maintains its break point for lower at 1.2980. Lower for CAD must break 1.3166, 1.3024 and 1.3006 to target and break 1.2980 then on to 1.2800’s and 1.2700’s.

CAD remains a short only strategy against a massive potential for a deeply lower price. CAD like its AUD and GBP counterparts holds an off kilter relationship to its averages.

Notice GBP, AUD and CAD and the off kilter relationships to its averages. NZD can assume it contains the same off relationship to its averages and the reason is derived from AUD, NZD and CAD are past members of the great British Empire.

When each left the British Empire, all adopted the same UK money market system against slight twists to distinguish each nation as its own separate entity.

In all, not much changed over the centuries as the FX script was written 200 years ago and remains in place today. AUD, GBP and NZD averages are equally oversold while CAD maintains equal overbought.

Brian Twomey

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