FX next week: Commodities, 14 currency pair levels and targets
|On the current random view to Commodities, Gold as XAU/USD and XAU/JPY trade deeply overbought. Cocoa trades massive overbought from the Softs. The speculation is the remainder category as USD Coffee, Orange Juice and Sugar also trade overbought alongside DXY.
The problem to downside moves for Commodities is DXY traded 105.00 to 106.00 for the past 3 weeks and 103.00 to 106.00 for the prior 4 weeks. Import and Export lines as all Commodities trades fairly neutral. DXY at 106.00's trades dead center from the drop from 114.00's to 99.00's. A DXY move is required to force Commodities to trade to at least neutral from severe overbought.
Cocoa is a big mover under wide wide ranges while Gold and XAU will trade extremely slow. Most vital Commodities to the world are Oil, Wheat, Corn, Soybeans and Coffee. All are big movers and trade wide ranges. The abundance of the Wheat supply is located in Ukraine. Copper is important because Copper is Steel. Demand for Copper assumes Manufacturing and Building construction.
The currency is the primary mover to Commodity prices followed by Inflation and Interest rate changes. Seen from Commodities are great trades from overbought rather than long term trades or Super cycles however the current view is cursory. A DXY Correlation will reveal if long term trades exist. Placement of Import and Export lines will serve as backdrops to the assessments.
USD/JPY
Trades last week were assessed and offered as normal weekly trades and BOJ won't intervene. We were short all JPY pairs. We're trading the 3rd round of shorts. Next week trades will resume as normal weekly trades again
The program is short middle 156.OO's to target 153.00's. Recall last week, USD/JPY must trade to minimum 153.00's an 152.00's in order to normalize.
GBP/JPY next week targets 192.00's, EUR/JPY 165.00's. CAD/JPY low 112.00's.
EUR/USD bottoms at 1.0717. Longs must break 1.0754 then EUR/USD hits a brick wall at 1.0835 and 1.0843. EUR/USD trades oversold and we're long for next week.
The EUR universe trades next week as oversold to EUR/AUD and EUR/GBP Vs overbought EUR/CHF, EUR/JPY, EUR/NZD and EUR/CAD.
NZD/USD trades deeply oversold. NZD as Rear guard next week prevents drops to EUR/USD, GBP/USD and AUD/USD. NZD/USD targets the break at 0.6001 then 0.6041. The longer term target at 0.6179 is next after 0.6041 completes.
NZD cross pairs trades oversold NZD/CHF and NZD/CAD.
AUD/USD also trades deeply oversold alongside NZD/USD. AUD/USD must trade comfortably inside the range from 0.6543 to 0.6733. Long AUD/USD and NZD/USD is the only strategy available.
Oversold GBP/USD targets the break at 1.2539 then 1.2625. Easy targets for next week.
USD/CAD targets 1.3573 and 1.3437. USD/CAD easily achievable 1.3573 next week.
GBP/CAD and AUD/CAD best shorts for next week.
GBP/NZD amd EUR/NZD great shorts for next week to target easily 2.1035 and 1.7964.
GBP/AUD watch 1.9219 and EUR/AUD 1.6482. EUR/AUD trades far more oversold than GBP/AUD.
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