Say Bye-Bye to Major Supports. We May Not See Those Levels for a While

And it happened! The bears were talking about this for a long time and it finally happened; a bearish correction. The price broke the long-term up trendline on the SP500 and is aiming lower. The target for the drop is still far away, so it might be nice to buckle up.

The DAX also dropped like a rock after the breakout of the long-term up trendline and the neckline of the triple top formation. The next target: 14100 points.

Although indices are sliding, gold is not climbing higher. A stronger dollar is definitely not helping.

The GBPUSD came back inside the falling wedge pattern. That’s definitely negative.

The CADJPY is aiming for the 38,2% Fibonacci to test it as a crucial support.

The EURNZD is inside a small sideways trend. A breakout from it, will show us a direction.

The EURJPY has failed to create the inverse head and shoulders pattern and dropped lower.

The USDJPY bounced from the upper line of the triangle and brought us a sell signal with the target being on the lower line of this pattern.

For a look at all of today’s economic events, check out our economic calendar.

Situation on Major Instruments Before the Inflation Data

The SP500 tries a reversal with an inverse head and shoulders pattern bouncing off a major up trendline.

The DAX is very close to breaking two major horizontal resistances.

Gold is on the way to test an important horizontal support at 1782 USD/oz.

Oil continues its upswing after escaping from the flag pattern.

The EURCHF needs to close the day above the down trendline in order to get a proper buy signal.

The EURJPY is in the process of creating a right shoulder of a very promising inverted Head and Shoulder pattern.

The EURNZD continues the drop after broken supports were tested as resistance.

The AUDCAD is going to test a major support level on the 38,2% Fibonacci.

The USDJPY is getting closer and closer to end the long-term symmetric triangle pattern.

For a look at all of today’s economic events, check out our economic calendar.

The New Week Starts With the Risk ON Mode

Indices are trying to start the new week off on the front foot.

SP500 bounces from the long-term up trendline in the same way it did many times before.

Gold escapes from the wedge to the downside. The negative sentiment is back.

Oil breaks the upper line of the flag and aims higher.

EURUSD goes down after the breakout of the neckline.

GBPUSD with a third Head and Shoulders pattern in a row. The previous two worked flawlessly.

AUDCAD, after a flat correction, is ready for another upswing.

USDJPY gets close to the end of the symmetric triangle, we’re waiting for a bigger move here.

EURJPY has a chance of creating a nice right shoulder, which would help to end the bearish correction.

EURNZD is ready to continue the downswing after the price tested broken supports as the closest resistances.

For a look at all of today’s economic events, check out our economic calendar.

Tuesday is a Correction Day!

So far Tuesday looks like a correction day pretty much everywhere; on indices, currencies and commodities.

The SP500 dropped to test the lower line of the triangle pattern.

The DAX is staying strong above major supports.

Gold dropped removing all the post NFP gains.

The GBPUSD is in an important battle on the neckline of the Head and Shoulders formation. A breakout could be lethal.

The USDCAD is climbing up to test a crucial mid-term horizontal resistance.

The AUDCAD is also in correction mode but still above the absolutely crucial support on the 38,2% Fibonacci.

The EURNZD has managed to climb back above the horizontal resistance but is still below the lower line of the flag.

For a look at all of today’s economic events, check out our economic calendar.

EUR/USD and GBP/USD Start a New Week With a Bearish Correction

Today is Labor Day in the US and Canada, so traders from North America aren’t active, which could lead to lower volatility.

The SP500 is in an ascending triangle pattern looking north.

The DAX has come back above major supports. That was a false breakout, which may result with a proper upswing.

Gold is in a correcting movement since Friday but still in positive territory.

The EURUSD started the new week with a drop. That’s thanks to the shooting star from Friday.

The GBPUSD is aiming at the lower line of the flag, it’s time to test it as a support again.

The AUDCAD is continuing the upswing despite a very pessimistic candle on Thursday.

The EURNZD broke the crucial horizontal support along with the lower line of the flag. That is a very negative sign.

For a look at all of today’s economic events, check out our economic calendar.

Three Bearish Days of a Correction is Enough or We Are Just Warming Up?

Stocks and indices are dropping but three consecutive bearish days, is usually as much as sellers can do. Is it a good time for a bullish reversal? Especially that the SP500 is currently very close to a very important up trendline.

WTI Oil broke a crucial horizontal support and is aiming for the first Fibonacci retracement.

Gold is standing firm supported by the risk OFF mode but slightly bothered by the stronger USD.

The EURUSD is still dropping after breaking the neckline of a huge Head and Shoulders pattern.

The GBPUSD still has some room to the neckline, which makes it a plan minimum for the sellers.

The NZDUSD broke an important dynamic support and is aiming lower.

The EURNZD is close to a bullish breakout from the symmetric triangle pattern.

The NZDCHF continues to decline after a false bullish breakout from a very handsome flag pattern.

For a look at all of today’s economic events, check out our economic calendar.

Monday Redness

We start a new week with a decline in major indices. The SP500 dropped and is aiming for the target of 4250.

The DAX, is aiming for the support level of 14800 after breaking a major uptrend line.

Gold is suffering from a stronger USD.

Oil broke the neckline of a head and shoulders pattern and is aiming lower.

The same with the EURUSD, here the potential drop can be huge.

The GBPUSD also broke a major support that is coming from the double top formation.

The EURNZD is waiting for a breakout from the symmetric triangle.

The GBPCHF is moving sideways inside of a rectangle pattern.

The AUDUSD broke the 23,6% Fibonacci and is aiming for the 38,2%, this is a very clean bearish setup.

For a look at all of today’s economic events, check out our economic calendar.

New Zealand Central Bank Ends Bond Purchases, Paving Way for Possible Rate Hikes

The Reserve Bank of New Zealand (RBNZ) kept its official cash rate at 0.25% but cut short a NZ$100 billion ($70 billion) bond buying programme, prompting local banks to bring forward calls for a rate rise to as early as August, which would put New Zealand at the forefront of countries to raise interest rates.

“The RBNZ has absolutely done enough hand-waving today to tick the ‘market-prep’ box for an August hike, with CPI and labour market data set to do the rest,” said Sharon Zollner, Chief Economist at ANZ Bank.

The move comes amid nagging inflation worries globally, with U.S. inflation data rising by the most in 13 years in June, adding to uncertainty about whether such inflationary pressures are transitory.

New Zealand’s pandemic-free economy has been growing on the back of a housing boom and strong retail spending, raising concerns that it may get overheated pushing inflation above the bank’s target and squeeze the labour market.

First quarter GDP swept past forecasts, rising 1.6%. A survey last week showed the business outlook was now better than pre-COVID levels, and hiring constraints and inflationary pressures were starting to bite.

The RBNZ noted that in the absence of further economic shocks, consumer price inflation pressure is expected to build over time due to rising domestic capacity pressures and growing labour shortages.

“Members agreed that the major downside risks of deflation and high unemployment have receded,” the RBNZ said in minutes of the meeting.

“The (Monetary Policy) Committee agreed that a ‘least regrets’ policy now implied that the significant level of monetary support in place since mid-2020 could be reduced sooner.”

CHANGE OF TACK

A rate hike this year would make New Zealand the first developed economy to kick off policy tightening. The Reserve Bank of Australia said earlier this month that it did not expect a rate rise before 2024.

The New Zealand dollar rose 1.1% after the announcement to $0.7017. Yields on two-year bonds surged 9 basis points to its high for this year at 1.668%.

“The RBNZ has clearly changed tack to decide that the time for reducing monetary stimulus is very near. The risk of inflation and employment undershooting the objectives has switched to the risk of overshooting should the current level of stimulus remain in place,” said Nick Tuffley, Chief Economist at ASB Bank.

The RBNZ slashed its interest rate to record lows in March last year and pumped billions of dollars in stimulus as the COVID-19 pandemic raged through the country and the globe.

New Zealand, however, managed to contain the spread of the virus, with the last community case of COVID-19 reported in February, allowing the economy to bounce back faster than most others.

At its meeting in May, the RBNZ had hinted at a hike in September 2022.

For a look at all of today’s economic events, check out our economic calendar.

($1 = 1.4253 New Zealand dollars)

(Reporting by Praveen Menon; Editing by Richard Pullin)

Euro Drops Like a Rock

Major indices are still pushing higher. Nothing has changed here.

We have a small change on Gold though, where after some time, we finally see a commitment in the bullish camp. The price created the double bottom formation and is heading higher after the breakout of its resistance.

We do not have a lot of trading occasions today but those which are present are pretty strong. Interestingly, all of them have to do with the Euro.

The EURUSD slowly but surely finished the right shoulder of a Head and Shoulders pattern.

The EURGBP is still to dropping after a false bullish breakout from the wedge formation.

The EURNZD has also dropped showcasing the power of a false breakout pattern.

For a look at all of today’s economic events, check out our economic calendar.

USD Is Giving Up the Latest Gains

The SP500 is in all-time-highs. Nothing to see here, let’s move on.

The Dow Jones is inside a flag formation, close to all new all-time-highs.

Gold is possibly trying to create the right shoulder of the inverted Head and Shoulders patterns, but it may only be wishful thinking.

The EURUSD on the other hand is definitely drawing a right shoulder.

The EURCHF is heading higher and aiming for the upper line of the flag, after a bounce from an ultra-strong support.

The GBPUSD is in bouncing from a crucial horizontal resistance, continuing the negative sentiment.

The EURGBP is inside a falling wedge pattern, a breakout to the upside quite probable.

The EURNZD has continued to drop after a false bullish breakout.

The GBPCHF, on the other hand, is in a fresh false breakout pattern with a great potential for a further huge slide.

For a look at all of today’s economic events, check out our economic calendar.

EUR/NZD Testing 38.2%-50% Fibonacci Resistance on Daily and 1H Charts

The EUR/NZD is building a bullish corrective pattern. The bear flag pattern usually indicates a downtrend continuation.

Today’s analysis analyses the EUR/NZD on the daily chart and 1 hour as we examine potential short trade setups.

Price Charts and Technical Analysis

EUR/NZD 31.5.2021 daily chart

The EUR/NZD seems to be in a strong downtrend. The bearish price swing is expected to be a wave 3 (pink):

  1. The pullback seems to be an ABC (pink) correction in wave 4 (grey).
  2. The second breakout below the 21 ema zone could indicate the end of the wave 4 (grey) pullback.
  3. A break (orange arrow) below the support trend line (green) would be the next confirmation.
  4. A deeper pullback to the 50% Fibonacci level is expected to act as resistance and a potential reversal.
  5. A break above the 50% Fib places this wave outlook on hold (orange circle) or invalidates it (red circle).
  6. The main bearish targets are located at the round levels of 1.6250, 1.60, and the -27.2% Fib target at 1.5860.

On the 1 hour chart, price action seems to be preparing for a bearish breakout but the wave 4 (grey) could extend into a triangle pattern:

  1. Price action could have completed a bullish ABC (orange) in wave 4 (grey).
  2. But the wave 4 could also extend sideways via a larger ABC.
  3. A bullish break above the 50% places the bearish outlook on hold (orange circle) or invalidates it (red circle).
  4. A bearish breakout (orange arrow) could indicate a downtrend continuation. But a break of the bottom is needed as well later on.

EUR/NZD 31.5.2021 1 hour chart

Good trading,

Chris Svorcik

The analysis has been done with the indicators and template from the SWAT method (simple wave analysis and trading). For more daily technical and wave analysis and updates, sign-up to our newsletter

For a look at all of today’s economic events, check out our economic calendar.

Terrible Month for USD but Maybe the Last Day Will Be Better

Gold attacked a crucial support again but this time with a very sharp fall.

Brent oil initiated a bearish correction.

The Dow Jones is still in a pennant waiting for a breakout.

The DAX is still in a rectangle pattern also patiently waiting for a direction.

The EURUSD has started a bearish correction.

The Canadian Dollar is still going stronger.

The EURAUD is in a symmetric triangle waiting for a breakout.

The AUDCHF is in a similar situation.

The EURNZD is also waiting to end the sideways trend but in this case, the price is locked inside of a rectangle.

The AUDJPY defends a crucial support level after the bullish breakout from the triangle. It’s an interesting opportunity in terms of risk to reward ratio.

The ZARJPY defends the neckline of the head and shoulders formation.

The USDHUF is in a long-term sell signal after the price drops below the major support.

For a look at all of today’s economic events, check out our economic calendar.

EUR/NZD Strong Bullish Momentum Aims at 1.70 Targets

The EUR/NZD made a strong bullish bounce at the 50% Fibonacci retracement level. The bullish breakout above the resistance trend lines (dotted orange) indicates more upside.

This article will review the EUR/NZD price patterns and targets, but also why this particular currency pair offers the best charting opportunities this week.

Price Charts and Technical Analysis

EUR/NZD 7.4.2021 4 hour chart

The Euro seems posed to be one of the strongest currencies this week with impressive gains against the USD, GBP, and AUD while keeping in balance with the JPY.

On the other hand, the NZDis mostly on the losing end versus the USD and AUD. With EUR strength and NZD weakness, the EUR/NZD seems ready for more upside:

  1. The EUR/NZD chart itself seems to have completed an ABC (purple) correction at the 50% Fibonacci support level.
  2. The larger picture remains unclear, whether price action is building an ABC or 123 (red)… But in both wave scenarios, more upside seems likely.
  3. The strong breakout followed by a push above the Fractal resistance is confirming a push higher.
  4. The intermediate main target is the 610 ema followed by the WIzz 7 level. These levels could create a bull flag chart pattern (grey arrows).
  5. A bullish breakout above the flag patterns should send the pair higher. The main targets are located at 1.70, 1.71 and 1.7170.
  6. Price remains in an uptrend as long as it stays above the support zone (blue box). A break below the support trend line (green) indicates a deeper retracement (dotted orange lines) towards the 31.8% Fibonacci level.

On the 1 hour chart, the bears have lost control and the bulls seem posed to push price up higher soon:

  1. The divergence pattern between the lows (purple line) has confirmed a reversal.
  2. Price action has broken above the long-term moving averages.
  3. The price action is showing strong momentum to the upside.
  4. A corrective pattern respected the 38.2% Fibonacci level and bounced back up.
  5. The corrective pattern saw a bullish breakout.

The bulls could push immediately higher. This offers potential on intra-day or intra-week time frames for more upside.

Eventually a retracement is expected. A bull flag pattern (grey arrows) followed by a breakout could indicate more upside.

7.4.2021 EUR/NZD 1 hour chart

Good trading,

Chris Svorcik

The analysis has been done with the indicators and template from the SWAT method (simple wave analysis and trading). For more daily technical and wave analysis and updates, sign-up to our newsletter

For a look at all of today’s economic events, check out our economic calendar.

EUR/NZD Showing Bullish Wave 3 Pattern After Moving Up 200+ Pips

The EUR/NZD is showing a strong bullish reversal at the Fibonacci levels and bullish breakout above the resistance. The bullish outlook was expected in our previous analysis where we analysed that a reversal was around the corner.

This article will review whether the reversal can go up even more and if so, what kind of targets are within reach.

Price Charts and Technical Analysis

EUR/NZD 23.03.2021 4 hour chart

The EUR/NZD made a strong bullish breakout above the resistance trend lines (dotted orange lines). This occurred after price action completed an ABC pattern (grey) without breaking the bottom of wave 1 or A (pink).

  1. The bullish bounce at the 61.8% Fibonacci retracement level is typical for a wave B zigzag pattern of an ABC (pink).
  2. But price could also be building a larger 123 pattern (pink) as well. This depends on how far the price will move up in the third wave.
  3. Currently price is closing to reaching the -27.2% Fibonacci target. A break above the -100% Fib target indicates a wave 3. Anything below that could be either a wave 3 or C.
  4. Price action could make a retracement at the -27.2% Fibonacci target and Wizz 7 Fibonacci confluence level for a pullback.
  5. The pullback should be shallow and show a continuation pattern such as a bull flag (grey arrows) if the uptrend is to remain valid.
  6. A break above the pattern (green arrow) indicates the continuation.
  7. Only a deeper pullback places the uptrend scenario on hold (yellow button) or invalidates it (red button).

On the 4 hour chart, price action is showing a wave 1-2 pattern. The current strong impulse – which broke above the -100% Fibonacci target – is typical for a wave 3 (orange), either of a larger wave C or 3 (pink) which is yet to be determined.

  1. The current strong impulse – which broke above the -100% Fibonacci target – is typical for a wave 3 (orange), either of a larger wave C or 3 (pink) which is yet to be determined.
  2. We are soon expecting some type of pullback. The -161.8% Fibonacci target could be a logical spot for such a retracement.
  3. A shallow pullback via a bull flag pattern makes the most sense in this case (grey arrows).
  4. The pullback could go back to the price zone of around 1.6830, 1.6780, or 1.6750 where a bullish bounce is expected (green arrow).
  5. The main target of the next push up is the confluence at the 1.70 with a Wizz 8 level and -200 FIbonacci target.

EUR/NZD 23.03.2021 1 hour chart

Good trading,

Chris Svorcik

The analysis has been done with the indicators and template from the SWAT method (simple wave analysis and trading). For more daily technical and wave analysis and updates, sign-up to our newsletter 

For a look at all of today’s economic events, check out our economic calendar.

Weekly Forex Commentary March 14, 2021

EUR/USD ranges this week severely diminish due to problems within the EUR universe. EUR/JPY remains light years overbought while EUR/NZD and EUR/CAD maintain oversold conditions. EUR/CAD broke its 5 year average at 1.4955 and trades ranges from 1.4955 to 1.4547 then 1.4427. EUR/GBP is oversold however it trades between 0.8740 to 0.8414 to the 5 and 10 year average. EUR/USD cross pairs will determine EUR fate this week to direction. 

GBP/NZD from this week’s close at 1.9374  sits on supports at 1.9330 and 1.9246. Last week vitals from 1.9318 to 1.9188 and the week prior 1.9318 to 1.9176. GBP/AUD from its close at 1.7927 contains resistance at 1.7934 then 1.8134 and last week 1.8130 to 1.7905 then 1.7885 to 1.8130. Both are problem pairs entering into the new week.

Week 7 to massively overbought JPY cross pairs. For the month, NZD/JPY rose 100 pips, barely 200 for AUD/JPY and EUR/JPY, 400 for GBP/JPY and a rare day for 400 pips to CAD/JPY. CAD/JPY beat USD/CAD by 100 pips as USD/CAD traded 300 pips. traditionally, USD/CAD always trades wider ranges than CAD/JPY as CAD/JPY is the follow pair to USD/CAD.

USD/CHF and USD/JPY begin the week deeply overbought while USD/CAD is severely oversold. The strategy this week is long USD/CAD, short CAD/JPY and refrain from trading laggard currencies, USD/CHF and USD/JPY. For problem pair USD/JPY lower must break the 5 year average at 108.98 then 106.43. Above at 109.00’s and 110 is maximum to USD/JPY averages dating to 1999. 

While GBP/JPY and GBP/CHF are overbought, GBP/CAD matches EUR/CAD to oversold and GBP/NZD and GBP/AUD as problem pairs. GBP/USD like EUR/USD is hostage to its cross pairs for direction. 

AUD/CAD and NZD/CAD both broke below vital points at 0.9737 and 0.9073. With NZD/CAD’s break lower, NZD/USD’s close at 0.7173 sits 53 pips above its vital break at 0.7120. Overbought NZD/JPY and NZD/CHF will assist NZD/USD’s eventual break at 0.7120. Then AUD, GBP and EUR slide further. 

AUD/USD big break lower is located at 0.7641. AUD achieves this challenge by breaks lower at 0.7716 and 0.7679. 

Gold remain inside 1815 to 1642. DXY 91.43 Vs 92.78 and 89.95 below. The 2 year yield broke above reported 0.1511 to trade 2 points higher to 0.1711. The 10 year yield at its 1.625 close, trades inside its wide ranges from 1.3305 to 1.8448. 

Respectfully readers, I work extraordinarily hard consistently over 17 years to write the most accurate levels, entries and targets, to bring the most accurate data and market concepts. Don’t believe my words as all is documented here.

EUR/NZD Bullish Reversal After Bounce at Key -27.2% Fib Target

Tthe EUR/NZD has made a bullish bounce at the -27.2% Fibonacci target. Is this pair ready for a larger reversal after its 3,500 pip decline?

Price Charts and Technical Analysis

EUR/NZD 12.03.2021 daily chart

The EUR/NZD downtrend is not officially over yet. But there is a fair chance that a bearish ABC (purple) pattern has been completed at the most recent low.

  1. A bullish breakout above the 21 ema zone and the resistance trend line (orange) confirms the bullish reversal (green arrow).
  2. The first target is the 144 and 233 ema zone.
  3. A bull flag pattern in this ema zone could indicate more upside.
  4. A strong push up could confirm a wave 1 or A (pink).
  5. A bearish break, however, below the -27.2% Fib target invalidates (red circle) the bullish reversal and indicates a continuation of the downtrend.

On the 4 hour chart, the bullish price swing seems to be a 5 wave pattern up (grey). This is probably a bullish wave 1 (grey – or a wave A).

  1. The current pullback is choppy and corrective and could be a wave 2 (orange).
  2. The wave 2 outlook remains valid as long as price action remains above the bottom and 100% Fib. A break below it invalidates it (red circle).
  3. A deeper bearish pullback (red dotted arrows) is expected to test the Fibonacci retracement levels and bounce (blue arrows).
  4. An immediate bullish breakout (green arrows) could indicate the end of wave 2 (orange) and the start of a wave 3 (orange).
  5. A bull flag pattern (grey arrows) could indicate more upside after the break (green arrow).

EUR/NZD 12.03.2021 4 hour chart

Good trading,

Chris Svorcik

The analysis has been done with the indicators and template from the SWAT method (simple wave analysis and trading). For more daily technical and wave analysis and updates, sign-up to our newsletter

For a look at all of today’s economic events, check out our economic calendar.

Weekly Commentary – EUR, USD and GBP

EUR/USD 1.2061, AUD/USD 0.7657 and USD/CAD 1.2783 decide future and current direction to all 28 currency pairs. EUR/USD and AUD/USD breaks then much lower or much higher. USD/CAD breaks 1.2783 then much higher or a failure to break then much lower.

JPY cross pairs remain overbought and reveal EUR/USD and AUD/USD will eventually break lower and USD/CAD breaks higher. GBP and NZD will then follow lower.

Not a driver to market prices this week are the typical alarm bells written by market writers with specialization in marketing rather than expertise in markets, trading and market prices. Elections, Covid, lockdowns, vaccines, central bank meetings, yields, month-end, Fed, Powell and the Mars rover landing failed to move market prices. Not at the time of release nor in subsequent trade days did prices move except to the degree intended from the start of the day or week.

A market price will achieve its destination by mathematical certainty without regard to outside events yet professional alarm bell ringers are surprised at a rise in yields, no movements to NFP and central bank meetings and to a price that fails to respond to their sounding of the bells in the market square.

NFP and fed meetings barely moved EUR/USD 20 pips in each of the last 6 and 8 months. Whistleblowers month-end and rebalance will be heard this week. Meanwhile, monthly averages haven’t changed in many months and a rebalance nor month-end changes to prices fails to exist as price fail to move enough to require changes to averages.

DXY monthly averages remain inside 89.95 to 91.43, Gold 1815 -1642. EUR/USD traded 1.1900’s -1.2200 in February, 1.2000’s to 1.2300’s in January. The 2 year yield traded 0.11 to 0.23 in the past 9 months. The S&P’s traded 300 points from 3900 to 3600 for February, 200 points for January. WTI traded 10 points in February from 51.00 to 61, and 6 Points for January.

Our professional alarm bell ringers are long on whistles but short on market competency. A Necessary yet least favored aspect to market prices, trades, and economics is the requirement to run and enter data for a clear picture of entries and exits and to understand the economic condition. But market prices and profits were never nor will ever be the ultimate goal to reporting.

The Week

The ultimate revelation to a cautious market this week is found in GBP/AUD and GBP/NZD. GBP/AUD at 1.8059 resides inside vital range points from 1.7885 to 1.8130 and GBP/NZD at 1.9318 to 1.9176. Both GBP/AUD and GBP/NZD from oversold last week drifted higher directly into a neutral zone for this week.

EUR/AUD and EUR/NZD however are deeply oversold and contains the ability to travel higher while GBP/AUD and GBP/NZD remain stuck in neutrality.

EUR/USD led the charge higher for non USD pairs upon the break of the 5 year average at 1.1300’s last July and is in the position to take down GBP, NZD and all non USD pairs. GBP/USD must break 1.3600’s and NZD/USD 0.7100’s to assist in a wholesale trend change.

Deeply oversold USD/CHF at 0.9084 broke higher from 0.9001, CAD/ZAR trades above 11.86 and USD/CAD is on the verge of a break higher at 1.2783.

GBP/USD retains slightly overbought status while next highest exchange rate GBP/JPY is deeply overbought and next lowest GBP/CHF also opens the week in richter scale overbought. Same situation exits for EUR/USD, AUD/USD and NZD/USD as EUR/CHF and EUR/JPY are both overbought. NZD/CAD and AUD/CAD offer no assistance as leaders to NZD/USD and AUD/USD direction as both sit in neutrality.

EUR/GBP challenges 0.8732 on a break of 0.8573 or a drift to 0.8400;s. EUR/GBP traded to exactly 0.8728 Friday then lower to close at 0.8655.

DXY remains in a 89.95 to 91.43 range and a break higher at 91.43 challenges 92.78.

For a look at all of today’s economic events, check out our economic calendar.

Weekly Round Up – February 21st, 2021

AUD/USD broke its long standing and much written line at 0.7821 and traded 57 pips to 0.7877. Above 0.7821, AUD/USD ranges between 0.7821 to the 10 year average at 0.8305 or 484 pips. Below 0.7821, AUD/USD trades 0.7821 to 0.7308 or 513 pips. Below 0.7821 exists 0.7605.

DXY last week maintained its 148 pip range between 89.95 to 91.43. Above 91.43 next targets 92.78 in a 135 pip range.

GBP as written in the last post maintains deep overbought status across all GBP pairs except GBP/NZD. Watch 1.9136 this week for best moves.

EUR/USD opens in fairly perfect neutrality however ranges continue to compress. Problem pair EUR/JPY and all JPY cross pairs maintain deeply overbought status for week 4. EUR/CAD, EUR/NZD and EUR/AUD open the week massive oversold. EUR/CAD and EUR/AUD will provide the best moves.

Stand clear EUR/CHF as AUD/CHF and NZD/CHF will provide better movements.

NZD/USD 0.7267 then 0.7356 Vs 0.7267 and 0.7990. NZD/CAD is overbought while NZD/JPY heading into week 4 maintains richter scale overbought status.

Overall, NZD/USD traded 200 pips from 0.7100’s to 0.7300’s for the past 2 months and provided support to GBP and AUD to allow both to move higher. Explains the divergence seen in EUR/NZD Vs GBP/NZD this week.

USD/JPY watch 104.97 and USD/CAD 1.2587 Vs 1.2826.

 

 

EUR/USD Vs USD/JPY and the FX Cross Pair Divide

Overall currency markets are in the great deadlock between natural opposites EUR/USD and USD/JPY. Current USD/JPY at 105.74 trades 84 pips above its vital high/ low point at 104.89. This line is rising. EUR/USD trades around its current high /low point at 1.2039. This line moved 1 pip lower since yesterday’s ECB at 10 A.M. EST. EUR/USD and USD/JPY achieved its crowning achievement by rhe great divide to currency pairs.

USD/CAD at 1.2600’s and GBP/USD at 1.3800’s or 1200 pips informs this distance is far to wide. GBP/USD trade to 1.4000’s while USD/CAD was located at 1.2500’s or 1500 pips assisted to diminish the distance yet 1200 pips informs a big move is ahead. Normal distance is 3 to 500 pips.

For the past four weeks as written, JPY cross pairs were and continue to trade in severely overbought territory. The degree of overbought is recognized as 500 pips from AUD/USD 0.7700’s and AUD/JPY at 82.00’s and 500 pips from NZD/USD 0.7100’s to NZD/JPY 76.00’s. Normal is in the vicinity of 100 to 200 pips maximum because NZD/USD and NZD/JPY are the exact same currency pairs much the same as AUD/USD and AUD/JPY.

The divide grows wider at 800 pips from GBP/USD 1.3600’s to GBP/JPY at 147.00’s and 700 pips from EUR/USD 1.2000’s to 127.00’s for EUR/JPY and normal is 100 to 200 because GBP/USD and GBP/JPY are the exact same currency pairs much the same as EUR/USD and EUR/JPY.

USD pairs EUR/NZD at 1.6700’s trades 2500 pips to GBP/NZD 1.9200’s. Normal trades around 1600 to 1800 pips and 700 pips off kilter.

The EUR/USD and USD/JPY relationship is distinguished by the massive and extreme divide between and among currency pair prices, particularly USD and overall cross pairs as the primary driver to current prices.

Today’s trade is presented as a two trade option by matching significant day trade support, resistance and levels. Short the highs and long the lows.

USD/JPY highs Vs EUR/USD Lows.

USD/JPY up target 106.43 vs EUR/USD 1.1985 lows.

USD/JPY 106.36 Vs EUR/USD 1.1998.

USD/JPY 106.29 V EUR/USD 1.2011

USD/JPY 106.16 Vs EUR/USD 1.2015

USD/JPY 106.09 Vs EUR/USD 1.2023

USD/JPY 106.03 Vs EUR/USD 1.2028.

USD/JPY 105.96 Vs EUR/USD 1.2034.

EUR/USD Highs Vs USD/JPY lows

EUR/USD 1.2107 Vs USD/JPY 105.37

EUR/USD 1.2099 Vs USD/JPY 105.44

EUR/USD 1.2091 Vs USD/JPY 105.51

EUR/USD 1.2076 Vs USD/JPY 105.58

EUR/USD 1.2068 Vs USD/JPY 105.63

EUR/USD 1.2061 Vs USD/JPY 105.71

EUR/USD 1.2053 Vs USD/JPY 105.79

EUR/USD 1.2049 Vs USD/JPY 105.87.

EUR/USD is a complete opposite pair to USD/JPY however prices never match pip for pip as the relationship runs 7.62 pips for EUR/USD Vs 6.62 for USD/JPY.As a side note all market prices especially Stock Indices are factored the exact same as a currency price. The difference is in the name and number yet its all the same.

Not many pips trade anymore as the old days of trading therefore pips and profits are maximized by multiple longs and shorts per currency pair. All information is known in advance of the trade therefore no stops, charts and whatever is needed nor applied.

Are We One Step Closer to a Major Correction?

Gold advances higher after the breakout from the flag formation.

Brent with a potential double top formation.

Nasdaq escaped from the rising wedge pattern.

DAX bounced from the horizontal resistance again and it is starting to look ugly.

EURUSD with a triple top formation.

EURJPY drawing a possible false breakout pattern. Major sell signal on the horizon.

EURNZD going lower after the price broke the lower line of the flag and later tested it as a resistance.

For a look at all of today’s economic events, check out our economic calendar.