FX next week: Levels and targets
|After 2 trades at 500 pips each, the EUR/USD price settled. From my own invented terms from research to describe price movements and targets, a settled price sits between averages and trades in small ranges. Nothing exists to trade. The long term trade is done and settled which means only small movements exist. And small movements will exist into the future.
Note EUR/USD today 1.0822 - 1.0955 and 1.0955 - 1.1137 and 1.1137 - 1.1300. Since target completion at 1.1048, EUR/USD traded in confined ranges at 200 ish pips.
Once the EUR/USD long term trade is done and finished then the method is to leave EUR/USD trades and focus on long term targets from other currencies. The object is to not only trade to price settlement but to profit from as many pips as possible. Particularly when we're currently trading the rare 2 year cycle. Time is never on our side as all currencies trade to price settlements.
Why trade EUR/USD when open trades and big profits exist to USD/JPY, JPY cross pairs, GBP/NZD, EUR/NZD, GBP/AUD, EUR/AUD. The trades are open and not yet settled to confined price settlement averages.
The 1.2700's target for GBP/USD settles the price in 200 pip ranges from 1.2591 to 1.2800 or the same 200 pips as EUR/USD. Once GBP/USD achieves the 1.2700's target, the trade is over and we leave GBP/USD to trade the remaining currencies not settled.
A long term target trade to price settlement can be viewed as trend to dead ranges. The object is to catch the trend early as we accomplished with many trades and trade to price settlement.
As USD/JPY, JPY cross pairs and wide range currencies achieve targets, we are stuck trading small ranges and small profits. Expertise is required here as the ease of long term targets is over and done.
What we traded over the past 5 months was the disjunction between anchor pairs and cross pairs. Anchor pairs and cross pairs divorced and must re marry. We traded to the re marriage.
As USD/JPY, JPY cross pairs and wide range currencies achieve targets then the entire currency market becomes settled into confined averages and small ranges. This includes EM currencies.
USD/PLN at 4.1400 settled USD/PLN's price. We left the trade to focus on other easy and more profitable trades.
What didn't matter to long term targets trades was 99% of the market events over the past 5 months. GBP/USD for example doesn't have a choice except to trade to 1.2700's despite interest rate raises, Inflation, bank failures, Powell and on and on with 5 months of meaningless events.
Next Week
EUR/USD break higher at 1.1137 trades 238 pips between 1.1137 to 1.1375. EUR/USD hits a brick wall at 1.1193 and 1.1200.
GBP/USD
GBP/USD's official break today is 1.2592. GBP/USD traded today to exactly 1.2592. GBP/USD had 5 attempts over the past week to break 1.2592 and failed. GBP/USD 1.2592 is a giant and vital line as it decides GBP/USD to the 1.2700 target immediately or GBP/USD drops and we are long again.
USD/JPY and EUR/JPY
USD/JPY correlation Vs EUR/JPY runs -0.006%. This means USD/JPY and EUR/JPY correlations are on the verge to turn back to positive. It also means USD/JPY and EUR/JPY is ready again to trade as 1 currency and 1 trade. As the week ends, official correlations will report for next week trades.
USD/JPY as reported last week targets low 135.00's. Not only did the target complete but USD/JPY broke below vital 134.93. Didn't matter where USD/JPY highs were located. If USD/JPY traded to 142.68 or 150.64, target remained 135.00's.
Targets vs entries
We hark back to Pete Haurlan, the rocket scientist turned market trader in the 1960's. Haurlan's job was steer rockets on course. The target is the stable end of the rocket while entry is at the front. The front entry was the moveable part that required steering guidance.
USD/JPY trade above vital 136.00's to 137.00's revealed an off course front end but front ends always correct to trade targets. Most important is the known target.
USD/JPY short trades are now located below 134.93 to target for next week 133.47. In following weeks, targets are located every 100 pips from 133.47. Next for example comes 132.74.
EUR/JPY lower must break 145.89 and GBP/JPY 165.78 as short only strategies continues to targets.
NZD/USD
NZD/USD trades fairly neutral at 0.6232 while averages are rising significantly. If NZD/USD continues to trade higher especially overbought to overbought then we know, NZD/USD target at low 0.6400's will complete.
GBP/CAD and EUR/CAD short for next week. USD/CAD short for next week.
USD/CZK
USDCZK Target 21.2468 from 2.5650 highs completed yesterday. Lows actually traded to 21.1840. USD/CZK a great currency to trade and same as USD/PLN and the usual suspects in EM.
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