Currency market: FX next week

From the weekly on Sunday: EUR/USD broke 0.9993 and first target at 1.0057 achieved destination, USD/JPY from 147.64 completed target at 148.40. DXY broke below 111.25 and traded to 109.00's. DXY from Sunday struggled and dropped from 112.00's.

DXY's break below 111.25 allowed EUR/USD and GBP/USD to break above most vital levels at 0.9993 and 1.1572. EUR/CHF and GBP/CHF assisted EUR/USD and GBP/USD higher by breaks above EUR/CHF 0.9842 and GBP/CHF 1.1381.

AUD/USD and NZD/USD failed to break above vital 0.6578 and NZD/USD 0.5913 to join EUR/USD and GBP/USD. AUD/USD and NZD/USD must break above vital levels or EUR/USD and GBP/USD must drop to maintain uniformity.

EUR/USD levels for today: 1.0072, 1.0078, 1.0084, 1.0091, 1.0104, 1.0110, 1.0117 Vs 1.0015, 1.0021, 1.0027, 1.0040, 1.0050, 1.0053

Most Vital 1.0015 and 1.0040 Vs 1.0091 and 1.0117.

EUR/USD vs DXY

EUR/USD for next week must break 1.0005 and another line around 0.9950 to target again 0.9700's. Next target above 1.0171. DXY maintains a big break at low 111.00's to target 113.00's. DXY traded 302 pips this week to EUR/USD 297. EUR/USD maintain perfect paces to DXY as DXY drives all markets.

EUR/USD strategy is short and long DXY and USD currencies.

Overall DXY is oversold and targets low 111.00's or 200 ish pips higher and this takes EUR/USD to 0.9800's if 0.9950's break below.

USD/CAD trades oversold and just above big break for lower at 1.3423. Oversold USD/JPY maintain a range from 144.41 to 145.93. Above targets again 148.98. Watch USD/CHF at 0.9844.

JPY cross pairs

JPY cross pairs 2 weeks running trades severely overbought to include CHF/JPY. JPY cross pairs are range trading rather than break or focus on breaks at vital averages in order to trend. JPY cross pairs are pretty much day trades with a short only trade strategy.

GBP/JPY leads the way forward while EUR/JPY traded in tiny ranges this week.. Both USD/JPY and EUR/JPY trade just above vital 142.00's. Much lower on a break and GBP/JPY at 164.00's.

EUR/CAD trades massively overbought while nothing special exist to GBP/CAD except to follow EUR/CAD lower.

GBP/USD big break are located 1.1572 and targets 1.1450 and only below 1.1450targets levels back to 1.1200's.

AUD/USD and NZD/USD trade in do or die mode to either follow EUR/USD and GBP/USD higher and break vital levels or EUR/USD and GBP/USD trade lower to take AUD/USD and NZD/USD down. Lower for AUD/USD targets 0.6300's and NZD/USD middle 0.5600's.

AUD/USD trades practically pips for pip to AUD/EUR and explains EUR/AUD trading in tiny ranges over last qwwks. Both AUD/USD and AUD/EUR trade oversold.

GBP/NZD trades overbought vs oversold EUR/NZD. EUR/NZD leads the way for GBP/NZD as EUR/AUD dictates moves to GBP/AUD. Best strategy is shorts to EUR/AUD and EUR/NZD. AUD/USD 0.6578 and NZD/USD 0.5911 holds EUR/AUD and EUR/NZD progress to trade in wider ranges.

Tuesday's Inflation story wss an anchor pair event as DXY traded 213 pips then EUR/USD and GBP/USD matched DXY at 213, USD/CAD 221 and USD/JPY at 308 pips. NZD/USD traded an extraordinary 175 pips to AUD/USD at 145.

Missing in action was cross pairs as EUR/AUD traded 140 pips, GBP/JPY 185, EUR/NZD 94, EUR/CAD 107, EUR/JPY 139 and 148 for GBP/AUD.

Cross pairs traded barely above 1/2 DXY ranges as compared to anchor pairs EUR/USD, GBP/USD. GBP/AUD and EUR/JPY were Wednesday's range winners at 172 and 218 pips.

Dow Jones

The Dow dropped 1000 points. On a 31,000 price, 1000 points lacks classification to a move. The Dow must travel at least 5,000 points to consider meaningful significance. The Dow at 1000 points is a media story rather than a market event.

Next week

EUR/USD expected close on Friday at 0.9986 then ranges from 1.0110 to 0.9986 and 0.9986 to 0.9863. Next week's long target is 1.0110. Deeply oversold EUR/CHF at 0.9600's lies just below EUR/USD's price and holds as EUR/USD supports.

Much higher EUR/USD must clear 1.0233 to target easily 1.0300's.

DXY is expected to trade from 110.64 to 107.13. At 110.64 remains below the 110.78 highs from 40 and 50 year monthly averages while 107.13 breaks to new lows.

The overall market story is EUR/USD Vs USD/JPY and DXY. USD/JPY serves as the best proxy for DXY. Both are the same currencies and both massive overbought, short and long term.

Expected close for USD/JPY at 142.27 then means short next week to target 140.00's and 139.00's. Any price above 142.27 is a gift for extra pips to shorts in the vicinity of 143.64.

GBP/USD at the 1.1576 expected close then ranges next week from 1.1380 to 1.1576 and targets just below 1.1770's. GBP/CHF at 1.1100's holds GBP/USD as supports.

AUD/USD is running into range problems. Tuesday's 145 pip day was an oversold story while last days, AUD/USD traded 50 pip days. AUD/USD's magic number for higher is 0.6930.

Massively oversold NZD/USD targets next week around 0.6165 on entry anywhere. NZD/USD is the best trade rather than AUD/USD as AUD/USD will underperform NZD/USD.

GBP/JPY 163.35 and EUR/JPY 139.76 hold JPY cross pairs from the big drop. Add USD/JPY at 136.00's.

JPY cross pairs began the week deeply overbought and remain deeply overbought for next week on a short only strategy.

To 24 Hour trades was added EUR/CHF and GBP/CHF for a 14 currency pair total. EUR/CHF was added to weekly trades for a 22 currency pair total.

EUR/CAD close at 1.3045 may not trade which means EUR/CAD relegates again to last place in the trade rankings. Same story as last week. GBP/CAD so far is the better long trade for next week to target just under 1.5300's.

EUR/NZD as written last week began the week overbought and traded higher this week. EUR/NZD trades in the strasosphere overbought. Good short trade to target 1.6400's.

GBP/NZD at 1.9164 is do or die approach as 50/ 50 exists to guess longs or shorts. GBP/NZD last week was deeply oversold at 1.8900's and traded 300 pips higher to 1.9200's.

GBP/NZD Vs EUR/NZD extreme divergence existed to oversold GBP/NZD Vs overbought EUR/NZD. GBP/NZD resolution a 1.9164 may resolve the divergent problem for next week.

EUR/AUD 1.4771 holds EUR/AUD higher. Short next week at 1.4900's to target low 1.4800's. Not much excitement to EUR/AUD.

GBP/AUD is materializing as the better long trade to target middle 1.7100's but like EUR/AUD no thrills exist to GBP/AUD.

Overall, expected is a normal trade week without violent swings.

DXY traded to 110.78 highs against tops to the 40 and 50 year averages at 110.72 to 111.55. Points 110.72 – 111.55 holds as tops for months to come. DXY tops are driving non USD anchor pairs higher such as AUD/USD, NZD/USD, EUR/USD and GBP/USD. DXY tops drove USD/CAD 100 pips lower to current 1.3000's from 1.3200 highs. USD/JPY from reported 144.82 tops now trades 142.00's.

DXY at current 108.00 crossed below 109.00's CAD/JPY. On the way higher for DXY to 110.78, EUR/AUD broke above vital 1.4740 to trade 1.4881 highs.

Next FX focus is wide range currencies EUR/AUD, EUR/NZD, GBP/AUD and GBP/NZD.

AUD/USD currently trades 0.6868 Vs AUD/EUR at 0.6749 and EUR/AUD at 1.4815. Last evening at 4:00 pm EST, AUD/USD traded 0.6750 Vs AUD/EUR at 0.6754 and EUR/AUD 1.4807.

As DXY dropped to assist AUD/USD higher, AUD/USD was provided further assistance to cross above AUD/EUR to trade 126 pips higher to 0.6876.

NZD/USD at current 0.6138 competes with NZD/EUR at 0.6081 Vs EUR/NZD at 1.6444 as NZD/USD crossed above NZD/EUR.

EUR/CAD at 1.3124 Vs CAD/EUR 0.7619 to CAD/CHF 0.7379 and CAD/USD 0.7695. Yesterday at 4:00 pm, EUR/CAD 0.7642 Vs USD/CAD 0.7640 and CAD/CHF 0.7414. Actual at 4 yesterday, USD/CAD 1.3090 Vs EUR/CAD 1.3085.

CAD/GBP at 0.6623 trades above NZD/GBP at 0.5286 and AUD/GBP at 0.5909.

Next week

DXY at 108.00's Vs EUR/USD at 1.0000's and parity offers roughly an 800 pip spread and down from 1100 at week's beginning. Despite DXY at extreme 50 year highs and judged by wide range currency reciprocals, moves won't see violent up and down swings but rather fairly normal movements.

EUR/USD is expected a close in the vicinity of 1.0052 to range next week from 0.9944 to 1.0085. EUR/USD big break for higher prices is now 1.0225. Targets next week then become 1.0154.

USD/JPY target and big break is located at 141.11. USD/JPY must break 135.00's for a deeper move lower.

JPY cross pairs trade severely overbought but must break for GBP/JPY is found at 162.47 and EUR/JPY at 138.59 while CAD/JPY is held higher by 104.00's, AUD/JPY at 93.00's and NZD/JPY 84.00's.

Next week to short JPY cross pairs targets EUR/JPY 140'ss and GBP/JPY easily 163.00's.

USD/CAD most vital is located at 1.2958 and targets 1.2834. USD/CAD broke below the 5 year average at 1.2980. DXY lower then targets USD/CAD at 400 pips from the 5 year average at 1.2563. Lower USD/CAD and DXY challenges EUR/CAD big break at 1.3245

GBP/USD trades 1.1574 to 1.1783 in wide ranges.

Severely overbought EUR/NZD for lower must clear 1.6338 and not much to changes since last week. Overbought EUR/NZD continues its wide divergence to oversold GBP/NZD.

GBP/CHF at 1.1200's trades a lifetime low never seen before in 69 years of trade since 1953. GBP/CHF at the 2008 crash traded 1.9948 and dropped 8700 pips or 600 pips per year.

EUR/USD topside yesterday was set against targets at 1.0256 and 1.0259. Both extraordinary moves for the day and both targets achieved for big profits yet EUR/USD breaks vital 1.0285 and trades another 82 pips to 1.0367. Note the location of 1.0285 as dead center of the hourly candle.

The break of 1.0285 then placed EUR/USD from 1.0285 to 1.0350. What allowed EUR/USD to travel higher was the ECB at 10:00 then EUR/USD was good until 1.0304. The BOE at 11 am stopped EUR/USD to begin the long slide lower to 1.0320. The Fed at 12:30 then settled EUR/USD at 1.0296 from 1.0367 highs or71 pips.

EUR/USD yesterday traded for the day overall 167 pips and about 67 more than normal. On the surface appears as just another EUR/USD trade day but 1.0285 set EUR/USD off 82 of the 167 pips or 1/2 of its total 167 pip range.

The 2 most vital points to traded markets are overall ranges and range points such as 1.0285. How much was 1.0285 respected was seen in the weekly trade target at 1.0283. Friends and subscribers profits were 130 ish pips but the pips were easy and guaranteed. And the trade duration was 4 days.

Range Vs Price shares the most unique relationships and most vital to understand market trading.

What were the trade options. Not only was EUR/USD overbought at 1.0285 for the day but 1.0285 location was dangerous. The only option was short and short anywhere.

EUR/USD moves yesterday were unusual, extraordinary and in mathematical weirdo ville. Correct was EUR/USD to reverse at 1.0250's. Who or possibly which central bank took EUR/USD higher from 1.0285 is unknown. We're not privy to such information anymore as was the norm in the old days from the top 4 banks. Previously, the top 4 banks release Flow Reports to determine who to major banks and central banks were big buyers and sellers.

EUR/USD Big break for higher is now 1.0420 and the range becomes 1.0357 to 1.0294. Below 1.0294 targets 1.0231 easily. EUR/USD Friday should close in the vicinity of 1.0168. The lower for EUR/USD is the better for the long trade next week.

GBP/JPY shorts yesterday at 163.82 traded to 163.64 then began the long drop to 161.00's. GBP/JPY vital at 162.01 allowed GBP/JPY to trade to 161.00's. Big break for higher is now 162.05.

EUR/JPY is on the verge to trade lower at 136.95. EUR/JPY is a horrible currency at the moment heading into week 3. EUR/JPY trades neutral to neutral without significant progress. EUR/JPY is more suited as a day trade. EUR/JPY broke vital 136.93 and traded 30 pips lower to 136.60. This should serve as a warning to EUR/JPY.

DXY achieved 106.45 and USD/CAD 1.2990's. As written yesterday, USD/CAD 1.2958 Vs DXY 106.45. The DXY V USD/CAD differential spread from 20 ish pips to 40's.

Higher for USD/CAD must break 1.2835. DXY now enters its next range from 103.00's to 105.00's. Vital above is located at 105.54, 105.76 and 105.80 Vs 104.30 below.

The breaks below for DXY was significant as much as 1.0285 was for EUR/USD.

AUD/USD broke above 0.7001 and lower for AUD/USD must crack 0.7013. Current range 0.7055 to 0.7096 then begins overbought and shorts.

Most important to overall currency markets is NZD/USD break above 0.6362 and today 0.6368. NZD/USD at 0.6417 is fairly neutral which means NZD has every ability to travel to 0.6500's or break below 0.6368. We're short next week in the vicinity of 0.6490's or long upon a break of 0.6368.

GBP/AUD yesterday was written longs at 1.7395. Correct was short at 1.7395. Deeply oversold GBP/AUD should be a big winner for longs next week. Same story for EUR/AUD.

USD/JPY for next week 131.61.

GBP/USD. Looking for a close around 1.2104 for longs next week. A close much higher then GBP/USD is on the last place of the trade rank list.

EUR/NZD as written yesterday long for a quick 50 pips at 1.6178. EUR/NZD traded 1.6150 to 1.6274. EUR/NZD current trades deeply oversold and informs NZD/USD could easily break 0.6368.

Gold traded 20 points yesterday and expected to trade 10 points today. SPX traded 31 points yesterday and within the 25 point framework. Max today is right at 47 pips.