The common theme in currency markets in the past 2 weeks was a standard 50 to 150 pip ranges against the caveat breakouts and big moves were on the way to expand trading ranges.
AUD/USD and NZD/USD held while GBP, EUR, USD/JPY and USD/CAD broke respective common theme ranges for 200 and 250 pips. JPY cross pairs traveled 200 and 400 pips. GBP/CAD as usual was the big winner in the Other Currency/CAD space at 270 pips while EUR/CAD traded 230 pips. Same scenario in GBP/CHF at 270 Vs EUR/CHF at 230.
The common theme among currency pairs rises this week to 75 and 200 pip ranges. Seen this week is USD drops vs corrections higher in Non USD pairs EUR, GBP, AUD and NZD as non USD achieved deeply oversold status. Despite correction, breakouts to respective break points will remain elusive as higher/ lower moves represent relief to oversold/ overbought conditions.
EUR/USD and GBP/USD will again fall into big winner status as well as deeply oversold JPY cross pairs in GBP/JPY and EUR/JPY. Deeply overbought USD/CAD will result in significant moves while USD/JPY will trade inside its normal 75 to 150 pip range.
Overall, currency markets functions as normal and outside danger to trade erratically is non existent.
As written weeks ago, all cross pairs became settled to respective prices to include JPY crosses and the USD V Non would lead the next market moves. This assessment was not only correct but USD V Non remains in full control to lead the cross pairs. Recall, March, April and part of May was strictly cross pair led while USD V Non held small ranges.
NZD/CAD was included this week because it wasn’t traded among the 28 majors during March, April and May trades. NZD/CHF, AUD/CHF and AUD/CAD remain holdouts to include in future posts.
EUR/USD targets this week are located at 1.1788 and 1.1824. Recall last week, EUR/USD achieved 1.1829 perfectly then dropped. Until EUR/USD breaks 1.1956 then moves higher must view as corrections to its current deeply oversold status. EUR/USD extremes below are located at 1.1625 and 1.1588. All week, EUR is in buy dip mode until targets achieve destinations. Target destination is expected early in the week and has potential to trade as AUD last week.
USD/JPY. Recall last week target at 109.46 achieved as USD/JPY had to trade to at least 109.46. Its did then continued its drop to 108.97 for a 241 pip weekly move from 111.38. This week USD/JPY target must trade to 108.62. Higher and not expected must break 109.47, 109.54 and 109.94. Most vital in this series is 109.54. USD/JPY sell rally is the way.
USD/CAD at 1.2974 trades at the upper top of its range and is skyrocket overbought. 3 weeks ago, USD/CAD top was located at 1.3038 while today the top is located at 1.3002. The averages are falling against CAD. The weekly target is located at 1.2864 for a 111 pip move. At 1.2864 is located just above vital point at 1.2833. Overall, CAD’s point at 1.2792 must break to target 1.2500’s. A break at 1.2833 then good shot to see CAD 1.2792 break lower.
GBP/USD is not only deeply oversold but GBP trades at the bottom portion of its range. The overall range is wide because its GBP’s normal wide ranges and trades from 1.3221 and 1.3285 to 1.3871. The must break point for significantly higher to target 1.3800’s and later 1.4100’s is located at 1.3614 and 1.3630. GBP/USD contains potential to trade easily to 1.3800’s. Target this week is located at 1.3437 for a 143 pip move and again inside the 150 ish common theme.
AUD/USD break point is located at 0.7625 and last week AUD traded to 0.7608 then dropped. At 0.7625 is expected to break to target next 0.7711, 0.7797 and later to 0.7808. AUD remains weeks later deeply oversold.
NZD/USD Break point is located at 0.7032 and 0.7041 to target 0.7132 and 0.7189. Overall, NZD as well remains deeply oversold and the weekly target is located at 0.6931 and 0.6999. Above 0.6999 then challenges 0.7041 break point.
GBP/JPY astronomical oversold targets this week 147.97 and if 149.09 breaks higher then further target becomes 150.36.
EUR/JPY targets this week 129.68 and this target is quite challenging as EUR/JPY must break 128.59 and 129.48. Despite deeply oversold, higher for EUR/JPY will remain a challenge as the averages work against EUR/JPY. The overall break point to confront top range point at 131.00’s is located at 130.94. A move higher in EUR/JPY as in GBP/JPY represents a correction to oversold.
NZD/CAD is firmly supported at 0.8593 and the break point for higher is located at 0.9006 from its 0.8971 close. A break at 0.9006 targets 0.9145 and 0.9165 and later 0.9189. Despite the 0.9006 break point, this level is not ready to break this week. The break point to decide higher or lower this week is located at 0.8965. Overall, no thrills exist in NZD/CAD.
Brian Twomey