GBP/JPY achieved target at 168.31 from 172.00’s. USD/JPY range 145.84 to 148.77 Vs. actual 148.84 -145.66. Next week: 145.87 – 148.65. Large ranges for USD/JPY; otherwise, nothing special.
From the FX weekly on Sunday, DXY 112.10 was the big line once DXY cleared the many hurdles at 111.00’s. DXY dead stopped yesterday at 112.15. For the FED, DXY traded 161 pips, and every 77 pips reported as support and resistance points, or 77 X 2 = 154.
For the Fed yesterday, DXY 110.99 vs. EUR/USD 0.9916. EUR/USD began at 0.9872 and DXY at 111.47. Neither price was touchable as immediate long or short. This is typical for all central bank meetings as every market price, currency, or otherwise begins at a neutral position.
DXY broke 110.99 to 110.43 or 66 pips, while EUR/USD traded above 0.9916 to 0.9975 or 59 pips. If ever free money existed in trading, yesterday’s example was prime. DXY from 110.43 didn’t have a choice except to long to a minimum of 110.99, while EUR/USD also didn’t have a choice except to trade lower to 0.9916.
In the larger scenario, all USD pairs had to trade long and all non-USD short. The potential was 60 pips per currency and free money. The Fed by itself holds no value of importance since the Fed is just another central bank and holds the same dilemmas and challenges as all central banks.
Consider movements. RBA raised 50 points and AUD/USD moved 30 pips, BOC raised 50, and USD/CAD traded 60 pips. As in the old days, no value to profits exists in central bank meetings.
The value for Fed meetings is DXY as, the determination of every market price on the planet. DXY price affects every stock, currency, yield, and interest rate. If not for DXY, Fed meetings would trade 30 and 50 pips.
BOJ
As written and suspected, the BOJ intervened twice, on Sept. 30 for 2838.2 billion and Oct. 31 for 6349.9 billion. The BOJ's history throughout is never intervening once but many times. Caution exists to further interventions, especially if the BOJ fails to raise rates.
The Week
DXY 115.00’s drops from contention to favor topside at 114.00’s. DXY remains in a 100 pip per week drop. Tops are located at low 113.00s and the same story as this week. Lower targets are located at high 109.00;s. Support and resistance points are located every 53 pips.
DXY ranges from high 109.00s to low 113.00s or 300-ish pips. As weekly DXY drops, the strategy moving forward is short USD, long EUR/USD, and non-USD. EUR/USD big break for higher is located at 1.0012, and next week ranges from 0.9813 to 0.9714.
JPY Cross Pairs
EUR/JPY, CHF/JPY and GBP/JPY trade just above vital 143.08, 145.12, and 163.61 while AUD/JPY and NZD/JPY trade oversold from 93.91 and NZD/JPY 84.69. AUD/JPY and GBP/JPY are the best trades for next week.
USD/CAD and massive overbought USD/CHF contain short-only strategies, while USD/JPY trades in wide ranges. GBP/USD targets 1.1400’s from current 1.1200’s.
GBP/AUD and EUR/NZD trade oversold against extensive line breaks at 1.7658 and 1.6894. A new marriage develops as long as both currencies.
DXY at 53 pips to support and resistance offers an average trading week ahead.