Currency market: EUR/USD vs USD/EUR

Brian Twomey Brian's Investment

EUR/USD Topside: 1.0340, 1.0347, 1.0353, 1.0360, `1.0373, 1.0379, 1.0386.

EUR/USD Bottom 1.0282, 1.0288, 1.0295, 1.0308, 1.0323.

EUR/USD Topside as USD/EUR = 0.9671, 0.9664, 0.9659, 0.9652, 0.9640, 0.9634, 0.9628. As EUR/USD rises, USD/EUR falls.

EUR/USD Bottom as USD/EUR = 0.9687, 0.9701, 0.9713, 0.9720, 0.9725. As EUR/USD drops, USD/EUR rises.

USD/EUR topside: 0.9682, 0.9688, 0.9700, 0.9706, 0.9712, 0.9718, 0.9725.

USD/EUR topside as EUR/USD = 1.0328, 1.0309, 1.0302, 1.0296, 1.0290, 1.0282. As USD/EUR rises, EUR/USD drops.

USD/EUR bottom: 0.9627, 0.9633, 0.9639, 0.9651, 0.9667.

USD/EUR Bottom as EUR/USD = 1.0344, 1.0361, 1.0374, 1.0380, 1.0387, , As USD/EUR drops, EUR/USD rises.

Every financial instrument currency, stock, commodity, whatever contains an equal opposite to assure ranges are tightly bounded, derived from interest rates and shown, proven by math perfect. Markets trade perfectly as scientific financial instruments and again proven by math.

Slight discrepancy between USD/EUR and EUR/USD levels. EUR/USD deals today with 52 while USD/EUR 49. Broken down to lowest common denominator, EUR/USD perfect at 6 pips and USD/EUR at 6.5 to explain slight difference at 0.5.

From academic research papers years ago, today's number 6 is called bounce patterns. USD/EUR and EUR/USD trades in 6 pip intervals which means every pip break must reside within the interval before the price moves again. The why is explained by EUR/USD and USD/EUR levels.

Note for example EUR/USD 1.0308 Vs USD/EUR 1.0309 or 0.9700. EUR/USD 1.0295 vs USD/EUR 1.0296 or 0.9712.

EUR/USD trades in a constant battle with USD/EUR as each side to movements is responsible for each other. Pips truly matter as every traded pip holds important commentary to the next traded price.

While this all may look simple and easily explainable, the upside and downside price are 2 completely separate animals. Downside prices must factor completely different from upside levels to capture opposite levels to the financial instrument.

SPX for example is viewed as 4003.58 but its also 0.0002497. Easier to view and trade SPX as 0.0002497 as only 5 points and 5 levels must convert to cover tops and bottoms.

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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