The currency market common theme this week is again focused on major break points inside the same 50 to 150 ranges for a vast majority of currency pairs. The prime example is EUR/USD break point at 1.1895 Vs USD/JPY at 109.41. The respective failure at break points held USD/JPY inside a 100 pip range last week from 109.20 to 110.25 and 181 pips for EUR/USD from 1.1657 to 1.1838.
Last week’s reported dark area in USD/JPY from 109.45 to 110.01 held for the most part and this week the same area exists from 109.45 to 110.04. Rarely seen dark areas represent untouchable zones until a price break is seen.
The second theme is USD/CAD, USD/JPY correction lower, EUR/USD and non USD pairs higher remains this week’s price path. This week will clearly decide as the internals inside current prices contains easily ability for EUR/USD to break 1.1895 and seen inside USD/JPY is a good prospect to literally drop like a rock.
What contains a massive USD/JPY fall however is seen in EUR/JPY and GBP/JPY higher against a range bound scenario in CAD/JPY and AUD/JPY. Clearly a volatile week is here and USD/JPY as the prime driver.
USD/JPY from the 109.55 close ranges from 109.42 to 109.69. Below most vital 109.42 targets remain from last week at 108.77 and 108.73 then possibly next week to further target 107.87. Above 109.69, sell points to target 109.42 and below to 108.77 is located at 110.04, 110.07, 110.22 and 110.44. Overall, any price above 109.45 becomes open for shorts and sell rally is the proper strategy as longs are impossible considerations.
EUR/USD must break 1.1873 and 1.1895 to target 1.1920 and 1.1954 then eventual 1.2058 and 1.2084. EUR/USD would then easily range from 1.2058 and 1.2054 to 1.2304 and 1.2357 as 1.2300’s represents breaks point to see a 1.2500 and 1.2700 EUR.
Below inside a EUR/USD weekly buy drop strategy, long points are located at 1.1730, 1.1722 and a solid line at 1.1679.
GBP/JPY main break point to target 150.14 is located at 148.17. To achieve 150.14, GBP/JPY must clear 148.33, 148.55 and 148.93. The clear higher or lower point is located at 147.23.
Below inside a weekly buy drop strategy, long points are located at 146.68 and 146.65 then 145.47 and 145.42. Lower 145.00’s are not expected however as GBP/JPY will trade extremely bullish all week.
EUR/JPY as stated last week, break point now 130.13 leads to the top and many many points at 131.00’s. Target at 129.57 achieves by breaks at 129.15. Main break point all week to decide higher/ lower is located at 128.52. Below 128.01 and 127.61 provides excellent long point for an all week buy drop strategy. Not a terrific choice in EUR/JPY as GBP/JPY provides a clearer price path and wider ranges.
EUR/AUD break point above 1.5567 targets 1.5675 and 1.5697. Any price above 1.5536, all week provides excellent sell points as the overall top in EUR/AUD is located at 1.5700’s. Longs are again impossible and short only strategy is the only way. Note the word “ANY”.
Look for shorts to 1.5417.
AUD/JPY break point is located at 83.60 from the 83.25 close. A break at 83.60 targets 84.46. Long drops is located at 82.80 and 82.06. To target a break at 83.60 then AUD/JPY must clear 83.16.
Not a terrific currency choice in AUD/JPY as range conditions persist from 82.00’s to 84.00’s since March. AUD/JPY qualifies as well as EUR/GBP, CAD/CHF in the lower end 50 ish pip ranges as not much is seen to movements to AUD/JPY.
AUD/USD break point now 0.7641 and a rising line by 17 pips higher from last week’s 0.7624. Long points and only strategy is located at 0.7580, 0.7577 and 0.7554. AUD in on a long only strategy. Break at 0.7641 contains best shot provided 0.7619 breaks higher. Overall target is 0.7677, 0.7703 and 0.7805 in weeks ahead.
GBP/USD break point at 1.3544 targets 1.3611 and 1.3689. In weeks ahead on a 1.3544 break targets 1.3700’s, 1.3800’s and 1.4100’s. GBP for the week is heading higher and buy drops at 1.3378, 1.3327 and 1.3277 yet doubtful to be seen. Long only is the only way forward.
USD/CAD. Same deal as last week, short only strategy and short “Any” price above 1.2998. CAD break point at 1.2848 targets 1.2760 and 1.2715 on a break below and 1.2576 in weeks ahead.
CAD/JPY. Same pair, same Stats, and same tired range conditions as AUD/JPY. Reason for similarities is Australia and Canada share many of the same structures inside respective money markets systems.
Break point is located at 85.17 to target 85.63, 85.89, 85.98 and 86.03.
CAD/JPY will struggle all week as USD/CAD decides its fate below 1.2848. Buy drops is located at 84.51, 84.30 and 84.11. As USD/CAD breaks 1.2848 then far higher to target 86.27 and higher will go CAD/JPY.
Again, note roughly 150 pip range and also note levels, ranges and targets are always exact week after week and year after year. Failure for major break points to break higher/lower will result in long rejection candles. Caution at vital break points.
Brian Twomey