At week’s start, EUR/USD begins at 1.1343 and USD/JPY at 113.65. Week 2 to USD/JPY living its currency market life as the permanent disruptor to price uniformity among all currencies. USD/JPY’s big break is located at 113.76. What can we possibly do with this?
From EUR/USD and 3 seconds, we can view ranges as 112.51 to 114.78. Both targets end with USD/JPY in neutrality and a continued problem for USD/JPY as neutrality is not a trade-able condition. USD/JPY at 113.65 begins the week in neutrality.
Currency markets are split into 2 separate entities: EUR/USD and GBP/USD Vs AUD/USD and NZD/USD. The driving line is right at about a factor of 2 to account for 2 currencies above parity and 2 below. Parity is the driving factor and the same situation for all financial instruments.
Between EUR and GBP and AUD and NZD is USD/JPY and USD/CAD. USD Vs non-USD contains an equal chance to drive and lead markets as from the 2 top currencies or 2 bottom currencies or the USD middle.
EUR/USD and GBP/USD are non-USD leaders due to higher ranges then ranges compress to AUD/USD and NZD/USD. The current inherent problem with currency prices is all ranges are compressed and strangled by moving averages.
EUR/USD and GBP/USD ranges fairly equal AUD/USD and NZD/USD. EUR/USD and USD/JPY ranges are fairly equal. GBP/USD and USD/CAD ranges are fairly equal. USD/JPY slightly beats USD/CAD.
As anchor pairs lead currency markets, cross pairs naturally fall into force compliance to range compression. The distortion to present currency prices is seen in overbought and oversold readings as readings are not true to movement conditions.
Understanding this concept is actually a benefit as trading compressed range markets is much easier and just as profitable. The only difference to wide ranges is the adjustment to distances.
AUD/USD and NZD/USD begin the week oversold and all cross pairs are compliant to oversold. The translation is AUD/USD and NZD/USD is oversold to EUR/USD and GBP/USD as well as in its own price while EUR/USD and GBP/USD begin the week in neutrality.
GBP/NZD has been a fairly consistent currency to hold acceptable weekly ranges and to provide constant profits. Ironically, EUR/USD is the next pair as weekly trade rankings remain constant around the number 1 position. GBP/NZD and EUR/USD won’t disappoint this week.
Currency prices appear to hold a 2-week theme. USD/JPY this week for example begins in the same horrible position as last week while the prior 2 weeks, USD/JPY ran and traded terrific for a source of good profits.
After this week, USD/JPY should be on track to trade 2 great weeks then back to dead neutral and terrible positions for the upcoming 2 weeks. JPY cross pairs find themselves in the same position as USD/JPY.
All 6 GBP pairs ran well last week yet normally, 3 of the 6 pairs rank as favored trades. From 13 currency pairs to exclude the 6 GBP pairs, about 5 and 6 pairs are worthy to rank high on the favored list. On good weeks, as high as 8 pairs rank favorably and 5 pairs as low rankings.
USD/CAD last week was a poor performer and this week is no different from the expected performance. CAD/CHF is the problem and mispositioned between CAD/JPY and USD/CAD. USD/CAD for the past 6 months hasn’t changed as its range remains 1.2269, 1.2585, and 1.3022.
GBP/USD big break is located at 1.3587 and USD/JPY 113.76 or 115.11 and 112.40. The best 3 GBP pairs this are are GBP/USD, GBP/CHF and GBP/NZD.
SPX 500 Update
S&P 500 targets are located at 4497.09. then 4268.80, 4032.75, 3859.03. Lows at 4397.
Trade Runs +300 ish points from 4700’s or 300 points in 7 weeks. or roughly 44 points per week.
EUR/USD Vs SPX 500
EUR/USD traded 258 pips in the past 7 weeks from 1.1200’s to 1.1400’s, or 129 points per month or roughly 35 pips per week, and runs comparable to SPX.
WTI Updates
Higher targets and short points for oil can easily travel to 79.99, 85.15, 89.43, 91.80, 92.02, 93.16 and 94.16. Since June: Range 61.62 to 86.96 or 25 points.
Monthly average range in 7 months, 3.5 points per month. June’s price was right at 65.00 as WTI traded at the 23-year monthly average. Short in June, as well as today, contains a continued short-only strategy.
USD/JPY Weekly Trade
Last week was the 9th trade-in 9 weeks and profit was +84 pips for a total of 1110 pips.
Long 113.18 and 113.10 to target 113.62. Long above 113.76 to target 114.63. Short 114.63 to target 114.20.