EUR/USD’s range this week is located from 1.0711 to 1.0378. EUR/USD first break higher must clear 1.0568, then 1.0619, 1.0669 and 1.0745, and 1.0784.
At the Sunday night open, EUR/USD will trade from 1.0551 to 1.0536. DXY is expected to trade at 105.33 and 105.18.
The Week Ahead
Friday’s Inflation moves clearly delineated overbought USD and oversold EUR, GBP, AUD, and NZD.
Overbought EM includes USD/CNY and a target at 6.9432, then 6.9298. USD/INR and targets 82.47 then 82.32. Massive overbought USD/ILS and targets 3.5830 from 3.6649. USD/NOK targets 10.2655 from 10.3667. USD/ZAR targets lower at 18.0995 on a break at 18.2787.
DXY below contains many averages to break at 103.00’s and above at 106.98, 107.38, and 107.80. DXY higher targets 105.55 than 105.63. DXY is not only overbought, but short is the exclusive trade available. Friday’s move from 104.90 to 105.32 was extraordinary.
Overbought USD/JPY targets 135.00’s beginning at 135.93, then 135.37. USD/JPY’s move lower coincides with EUR/JPY’s target at 141.00’s and GBP/JPY at 159.00’s. GBP/JPY’s first break is at 162.01 and EUR/JPY at 142.36.
Overbought USD/CAD conforms perfectly to severely oversold CAD/MXN. Higher CAD/MXN targets easily 13.6947 from 13.5122. Not working for USD/CAD is CAD/JPY vital 100.33 and the open at 100.26. Higher CAD/JPY trades against overbought counterpart JPY cross pairs, especially GBP/JPY and EUR/JPY.
GBP/USD and GBP cross pairs in the GBP universe are the shining lights this week. GBP/AUD is not only overbought but complies to overbought EUR/AUD. Overbought GBP/NZD agrees to overbought EUR/NZD.
The GBP/USD strategy all week is long drops. Above 1.2024, then targets middle 1.2100’s easy. GBP/CHF requires a break at 1.1238 and assists to GBP/USD higher.