Currency market: EUR/USD January, USD/JPY, US Dollar Index, USD/PLN

Brian Twomey Brian's Investment

In EUR/USD 23-year history since 1999 to include 2022, EUR/USD dropped for January overall 14 months and 8 months were up. January 2019 was a question mark due to a Doji candle, The current January of 2023 appears to end with a red down candle for a 23-year total of 15 down months vs 8 month up.

EUR/USD trades from 1.0412 and 1.0434 to 1.0852. Below 1.0412 targets 1.0383 and 1.0332.

Last week, EUR/USD was oversold from 1.0847 and overbought from 1.0400's. At 1.0600's, EUR/USD sits dead neutral.

Upside, 1.0522, 1.0632, 1.0687, 1.0742, 1.0797, 1.0824.

US Dollar Index

DXY top at 114.79 stopped short of its historic average at 120.00's and 121.00's as both averages were holdovers from the 1985 Plaza Accords and 1987 Louvre Accords. DXY traded to 165 highs in the 1980's.

The 50 year average remains at 96.00's and 5 year average at 95.00's. Since 114.79 highs, DXY averages from above continue to fall as DXY trades lower. Current averages are located at 104.00's and 105.00's. As DXY trades to low 103.00's and 102.00's, averages at 104 and 105.00's will continue to descend.

The DXY strategy is short as 96.00 from current 103.00 contain another 700 pip drop. And just to challenge 96.00's.

USD/JPY

The current target for USD/JPY is 122.35. USD/JPY must break 125.51 to achieve this target to then place USD/JPY in a 600 pip range from 125.51 to 119.36.

Next targets below are 128.96 and 125.15. Topside averages at 136.00's continue daily drops. Currently 135.91 and 136.02 are vital. Both averages will continue drop to 135.00's and 134.00's.

USD/PLN

USD/PLN at 4.4047 trades from 4.2842 to 4.4075, 4.5097 and 4.5308. USD/PLN big break is 4.5097.

Lower targets on a short only strategy: 4.3527, 4.2439 and 4.1579. USD/PLN will follow DXY much lower.

2 and 10-year yields

From the December 2021 forecast article.

2 year yield at the 5 year average for 2021 was 1.3025 and 1.6349 today.

The 10 year yield at the 5 year average in 2021 was 1.9150 and today 2.0484.

Author

Brian Twomey

Brian's Investment

Brian Twomey is an independent trader and a prolific writer on trading, having authored over sixty articles in Technical Analysis of Stocks & Commodities and Investopedia.

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