Currency markets operated normally last week and are expected to trade and move within ranges normally this week. Currency prices are trading in wide ranges without significant breaks to vital averages seen in order to trend and provide direction.
Divergence, however, exists to an overbought EUR/NZD and GBP/NZD which is undecided as it opens directly against a big break at 1.9434. EUR/NZD is the better currency as it contains range ability while GBP/NZD doesn’t have a clue for the week as ranges are deeply compressed. EUR/NZD’s move lower is a correction unless 1.6552 breaks.
Further problems exists between GBP/AUD and EUR/AUD. GBP/AUD trades below its vital average at 1.7759 while EUR/AUD trades above 1.5125. Despite the bi-weekly divergence, the GBP/AUD range traded 326 pips last week to EUR/AUD at 296.
Divergence between GBP/AUD and EUR/AUD may exist within 2 specific averages, but is non-existent to co-movements. Divergence may appear between GBP/NZD and EUR/NZD, yet it is non-existent to co-movements as GBP/NZD traded 381 pips last week to EUR/NZD 351.
DXY Vs EUR/USD
On a weekly basis, DXY vs EUR/USD have, since last November, both been trading 200 pip ranges. EUR/USD last week traded from 1.0400 to 1.0600 vs DXY 103.00 to 104. Two weeks ago, EUR/USD traded 1.03 to 1.05 vs DXY 103.00 to 105.00.
Three weeks ago, EUR/USD 1.05 to 1.07 vs DXY 101.00 to 104.00. Four weeks ago, EUR/USD traded 1.06 to 1.0700’s vs DXY 101.00 to 102.00. Five weeks ago, EUR/USD traded 1.05 to 1.0700 vs DXY 101.00 to 103.00.
On June 15, when the Fed raised 75 points, EUR/USD traded 94 pips vs DXY 91. EUR/USD trades above DXY yet, if DXY’s decimal point is moved, EUR/USD supports are found. The EUR/USD vs DXY relationship drives not only currencies, but all markets.
Gold Vs SPX Vs DXY And EUR/USD 200 Ips Ranges
Weekly gold ranges trade between 1/4 to 1/3 of EUR/USD and DXY. Gold’s last 8 weekly ranges stacked up as 32, 75, 53, 49, 32, 62, 89, and 61. SPX runs consistent to EUR/USD and DXY as we've seen these last few weeks: 185, 200, 276, 100, 280, 276, and 209.
Best SPX longs and shorts are found above the 200 pip range and long when the range trades severely below 200.
The Week
EUR/USD—Last week’s target at 1.0677 traded to 1.0605 from 1.0466 lows. EUR/USD this week targets 1.0653 from 1.0498 lows.
DXY—Last week 106.00’s overbought to lows at 102.00’s. DXY traded 110 pips last week from 104.00 to 103.00’s. This week, DXY becomes overbought at 105.00’s and targets 103.59 for about 141 pip range.
USD/JPY—Last week shorts from 136.00’s targets 133.01, Lows traded to 134.22 or 178 ish pips. This week’s shorts from 136.00’s targets 133.64.
GBP/USD—As written Thursday, longs target this week lower to middle 1.2400’s. Actual target 1.2442.
SPX—Last week targets 3889. SPX closed at 3911. In 2 of the past 3 weeks, SPX traded perfectly to targets. This week’s highs are located at 3960 vs lows at 3671.
XAU/USD and XAU/EUR—Last week, XAU/USD targeted highs at 1896.18 while XAU/EUR targeted 1804.97. Both bottomed at XAU/EUR 1717.58 and XAU/USD at 1787.88. XAU/USD range traded from 1816 to 1850 while XAU/EUR traded 1724 to 1758. XAU/USD targets highs this week at 1857 and lows at 1808 for another dull trade week while XAU/EUR targets 1766 vs lows again at 1717.
10-year Yield—Last week targeted 3.59 then short to target 3.06.The 10 year traded to 3.31 and lows at 3.01. This week targets 3.38 Vs lows at 2.94.