Currency Market: EUR/USD, USD/EM, AUD/NZD Oversold, JPY cross pairs lower
|The positive aspect to currency prices is ranges are slowly expanding which means far better trades and profits are in development stages. The week begins for most G28 currencies in fairly neutral territory and translates to an average week to movements. USD in the EM space remains deeply overbought as EM markets continue to dictate USD movements for now week 2.
Holdouts to G28 currencies are oversold EUR/NZD and GBP/NZD. EUR/NZD enters problem status and this translates to range troubles while GBP/NZD sits just above vital 1.9615. Last week's GBP/NZD closed at 1.9633 and just ahead of vital 1.9614 and traveled 173 pips to 1.9806.
AUD/NZD begins the week deeply oversold as shorts are impossible. AUD/NZD closed at 1.0563 and longs are located at 1.0559 to target 1.0633 then 1.0648. for a quick 74 and 89 pips. AUD/NZD is rarely an active traded currency in our universe because its generally a dead mover however AUD/NZD is sufficiently oversold enough not to pass on the long trade.
Oversold EUR/USD and overbought USD/CHF represent the next G28 holdouts to the week. EUR/USD is more oversold than is USD/CHF overbought. While USD/CHF closed at 0.9185 and must break 0.9143 to trade lower, DXY closed 106 pips higher than USD/CHF at 92.12.
While DXY and USD/CHF traded and traveled together for the past month, a pip spread separation now exists between DXY and USD/CHF and a point to monitor closely over the next week. Rough resistance exists for DXY from 93.00's to the 5 year average at 95.00's and only 200 iss pips from current 92.00's.
Overall EUR/USD maintains a long only strategy until middle to upper 1.1800's trade. Then EUR/USD faces crucial decisions to break vital 1.1900's to travel higher or a deep drop will occur to 1.1776. Overall EUR/USD remains stuck in 100 pip weekly ranges yet on the mend to wider ranges and better movements. This week will determine EUR/USD fate to how EUR/USD will trade in upcoming weeks.
JPY cross pair story remains the same as in past weeks, short only strategy for the next 500 pips. USD/JPY to trade lower must break 109.34 then 109.10. A market gift short if USD/JPY trades at 111.00 this week to target 110.17 on a break of 110.45.
GBP/AUD and EUR/AUD maintsans a short only strategy.
USD Vs EM
As written and traded successfully last week, USD in the EM space for week 2 remains deeply overbought. USD/ZAR along with most EM pairs followed weekly represent market gifts short. The average move for USD represents right at 235 pips to exclude USD/ZAR and USD/TRY.
USD Vs EM trades
USD/TRY maintains deep oversold status this week and targets 8.6700's.
overbought USD/ZAR targets 14.7441 then 14.6967.
USD/MYR short 4.2261 and 4.2290 targets 4.2116.
USD/PLN Short 3.8866 targets easily 3.8604.
USD/RON short 4.1855 targets 4.1633
USD/CNY short 6.4854 and 6.4870 to target 6.4776.
USD/DKK Short 6.3228 and 6.3264 to target 6.2872
USD/KRK Short 6.4034 to target 6.3589
USD/HUF Short 306.27 to target 303.69
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