The commonality to currency markets is the battle lines are drawn between non USD pair prices sitting on massive and solid supports while USD, as in DXY, USD/JPY, USD/CHF and USD/CAD broke below and sit against solid resistance points.
EUR/USD
Massive supports are located at the high 1.0400's. Higher prices must break 1.0788 then 1.1300’s are easily achievable. EUR/USD 1.0400’s vs 1.0700’s factors a normal 300 pip range. The month is May and the EUR/USD season is upon us for EUR/USD to begin its advance higher.
EUR/USD dropped 1200 pips since the 5 year average break in December 2021. January, February, and March, EUR/USD averaged monthly drops at 300, 389, and 295. April was EUR/USD best month at a 600 pip drop. Overall, EUR/USD averages about 390 pips per month.
The EUR/USD weekly target is located at 1.0661 and just ahead of the vital 1.0700’s break.
EUR/USD Vs DXY
The EUR/USD 1.0700 break is matched by DXY vital supports at 102’s and 101.00’s. DXY's current drop is coming from 105.00’s reported weeks ago. DXY trades below EUR/USD high 1.0400’s supports.
DXY's range trades 300 pips from 102 to 105.00’s.
GBP/USD is solid at 1.2300’s supports; next break is located at 1.2700’s as the range runs 400-ish pips from 1.2300’s to 1.2700’s. A break below 1.2300’s targets 1.2100’s again.
AUD/USD approaches its big break at 0.7141 to then target 0.7200’s. Above 0.7141, the range shifts from 0.7141 to 0.7300’s. AUD/USD 0.6900’s for the week are solid supports and long is the only trade.
NZD/USD 0.6562 is the big line break for a move higher. Current range is located at 300 pips from 0.6200's to 0.6500’s.
USD/JPY must clear 128.00’s and 129.00’s resistance points for any chance of moving higher. USD/JPY's big break lower must clear 124.00’s and match EUR/USD at 1.0700’s. Both break points are game changers to the USD vs Non USD relationship to solidify a wider division from non USD to USD.
USD/CHF at 0.9700’s must clear 0.9800’s then 1.0100’s and 1.0200’s. Note DXY supports at 101.00’s and 102.00’s vs USD/CHF. The current USD/CHF range is located from 0.9626 to 0.9800’s or 200 pips.
As written months ago, the USD/CHF vs DXY relationship will trade 300 pips from each other and long into the future. Current USD/CHF and DXY spreads are 278 pips. No changes expected into the future.
USD/CAD trades between overall vital points at 1.2300’s vs above at 1.2980. Watch 1.2777 for weekly longs and shorts.
JPY Cross Pairs
GBP/JPY is the clear leader to JPY cross pairs followed by CAD/JPY. EUR/JPY, AUD/JPY, NZD/JPY and CHF/JPY. GBP/JPY trades within a smaller range from overall 148.00’s to 168.00’s.
USD Yields
USD yields from 3-months to 30-year trade just below vital averages. Overall currency, stock, and commodity markets are at vital points due to yield location in relation to overall market prices.
Yields are trading fairly dead currently and this dead movement forces commodity prices to attach to FX pairs and trade at high positive correlations. Correlations should run negative as in DXY vs WTI.
Markets require yield movements to re-align commodity and FX prices correctly.
S&P
S&P 500's next short target is located at 3740.
Exxon
Exxon Mobil (NYSE:XOM) trades on Monday from target to target at 94.38 and 89.61, with a low for the week at 87.54.