Currency market: EUR/USD vs USD/JPY and JPY cross pairs

Brian Twomey Brian's Investment

EUR/USD big break for higher is located at 1.1862 and EUR/USD trades below. USD/JPY broke vital 109.65 and trades below to achieve lows at 109.45. EUR/USD and USD/JPY are mispositioned. Either USD/JPY trades above 109.65 or EUR/USD trades above 1.1862. Correct as 2 opposite currencies and to align USD vs EUR, currency markets must align all USD and non USD correctly.

GBP/USD for example trades below 1.3842, NZD/USD barely above 0.7080 and mispositioned USD/CAD trades above 1.2563.

USD/CAD at severe overbought is clear to again short to 1.2621 on break at 1.2641. USD/CAD last week closed at 1.2686 and trades current 1.2679. Rarely seen for weekly trades to return to the close price but EUR/USD and USD/JPY as misaligned currencies is possible for any scenarios until both rightsize.

USD/JPY affects JPY cross pairs as deeply oversold EUR/JPY trades below 130.06, GBP/JPY trades below vital points. Deeply oversold AUD/JPY trades below and watch NZD/JPY 77.64.

Deeply oversold CAD/JPY sits below 87.31. Recall Sunday CAD/JPY trade to the 2nd leg. Short 87.19 to target 86.88. CAD/JPY traded to 86.33 lows and closed last week at 86.55.

Not only is EUR/USD and USD/JPY misaligned but JPY cross pairs must decide correlations to either EUR/USD or remain with USD/JPY. Misaligned EUR/USD and USD/JPY means JPY cross pairs contain an equal chance to again align to EUR/USD or USD/JPY.

Best trades to cross pairs are long EUR/JPY , AUD/JPY and CAD/JPY. Stand clear GBP/JPY, NZD/JPY and CHF/JPY. CHF/JPY is deeply affected by USD/JPY as the same exact currency.

EUR/USD and USD/JPY must rightsize this week or next week's trades face crucial selection issues to which pairs are most vital to ease and profit pips.

USD/JPY day trade top is located at 110.07 and 110.01 on a break of 109.79 however 109.65 must first clear above. If the currency price is off kilter or misaligned then all financial instruments are affected as the currency price is the gateway to determines all market prices.

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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