GDP yesterday reported -0.9; we had -1.0 and the Atlanta Fed -1.2. The data showed that the Atlanta Fed was off its forecast. Not that it matters, as the currency and market price would’ve traded to the same levels despite the variation in GDP forecasts.
The laugh to the forecast is that 12 numbers were required, and voila, -1.0 was done. Anybody could’ve performed the same quick operation and found -1.0. Anybody today can factor in the new GDP averages and find the next GDP release. Nothing will change in 3 months.
The GDP and any economic releases are stand-alone entities and factors by themselves. The only difference between today and yesterday is a slight average change. And the change is very slight. The one-year average at 1.04 should drop, so the forecast, in turn, should also drop for the next quarter.
NFP is coming, and NFP as a stand-alone release factor is the same as GDP averages. Currency markets next week's focus is on the big MA break to MA points and terrific movements. Market prices brought us to the brink as markets are known to perform repeatedly.
USD/JPY is the main focus as 132.36 is here to change the entire USD/JPY trajectory from longs to shorts.
JPY Cross Pairs
EUR/JPY broke lower yesterday at 137.88 and trades at 135.00’s. GBP/JPY broke below 162.72. NZD/JPY broke below 83.95. AUD/JPY and CAD/JPY are holdouts at 92.45, and 102.96 for CAD/JPY.
EUR/USD has a long way to go before 1.0439 breaks higher. Monitor bottoms to EUR/USD by EUR/CHF current 0.9736 and a big break for higher at 1.0034. Also USD/CHF at current 0.9515 and big break at 0.9619.
EUR/USD trades from 1.0439 to 1.0034 and USD/CHF 0.9619.
GBP/USD 1.2321 waits for a higher GBP. GBP/CAD is oversold from 1.5826. Recall FX weekly and higher for GBP/CAD. GBP/CAD traded 200 pips higher this week. GBP/NZD remains a problem pair and GBP/AUD trades at the mercy of AUD/USD.
Overbought AUD/USD big break is located at 0.6992. NZD/USD 0.6354 waits to trade higher. At the week's beginning, oversold EUR/CAD traded 200 pips higher and remained deeply oversold.
USD/CAD 1.2852 for higher. Higher is guaranteed if CAD/JPY breaks below 102.96. EUR/AUD trades massively oversold and good longs for next week. From 1.4500;s, a good target is 1.4700’s.
EUR/AUD is the best trade against GBP/AUD and EUR/NZD better than GBP/NZD. Severely overbought AUD/EUR explains AUD/USD to break 0.6992.
DXY 106.50’s for higher to target 107.00’s.
Gold/Silver Ratio
Currencies for 2000 years are characterized as Gold or Silver currencies, and the connection was established in antiquity. The connection in the modern day can’t ever change.
Silver currencies are the lesser valued 0-point currencies. Asia, Central, and South America are classified as Silver currencies. Mexico is a Silver Currency.
USD, Europe, and Canada are gold currencies classified by their 1.0 exchange rate designation.
If the Gold/Silver ratio is high or at a vital level, the effect is seen from Gold Currencies as Gold currencies will also trade at a vital MA point.
On its best days over the past 3 and 4 weeks, gold traded 30 ish points while EUR/USD traded 100 ish pips and a difference of 70 ish points.
Silver traded 1 point yesterday Vs 120 pips for JPY/USD 0.7545 to 0.7424. Weekly Silver traded 2 points from 20.22 to 18.21 vs. JPY/USD 276 pips from 0.7545 to 0.7269.
For every 1 point traded in Silver, JPY/USD trades 100 ish pips. Best to convert exchange rates to work with smaller numbers.
Gold and EUR/USD working the same as Silver to Silver currencies such as JPY/USD. Roughly 30 points to Gold trades 100 ish pips for EUR/USD.
Not much will ever change in the Silver vs. Silver currency ratios nor Gold vs. Gold Currencies as relationships were established 2000 years ago.
If the Gold /Silver ratio relationship is shallow with silver and silver currencies, go long as all are oversold. If gold is high, then short Gold Currencies as Gold currencies are overbought.