For the past 4 weeks, EUR/EM Vs USD/EM aligned as oversold, neutral, neutral, overbought and for the upcoming trading week, massive overbought or massive oversold.

EUR/USD began the week deeply oversold and shorts are impossible while USD/JPY and USD/CHF comply to deeply overbought as longs are impossible. USD/CAD began the week deep oversold yet CAD's week began trading just above a vital MA and in a horrible position.

USD/JPY overbought began last week from 110.30's as longs became contrary to correct trading.

Currency pair trade selection to EUR/EM and USD/EM is crucial to profits as the EM market lacks uniformity as EUR/EM and USD/EM.

What separates EUR/EM Vs USD/EM exchange rates is roughly 2000 pips and EUR/EM is always the higher currency to USD/EM as shown. From reverse exchange rates, the opposite is true as EUR/EM trades below USD/EM yet the 2000 pip range holds for reverse exchange rates.

A 2000 pip separation to EUR/EM and USD/EM is miniscule in comparison to traditional EM ranges and movements. EM currencies traditionally trade 8, 9, 1000 pip weeks and more for certain currencies. The problem for EM currencies over last months is ranges completely compressed to the point EM currencies look and trade as dead range G28 currencies, hardly a difference.

Its not unusual for USD and EUR to marry and trade in currency markets as close as kissing cousins in both G28 and EM markets. Lack of interest rate distance as the underlying to exchange rates for ECB and Fed interest rates is the main problem. Neither ECB nor Fed interest rates move anymore and this prevents movements to currency prices to force range compression.

Yet range compression to EM markets may reveal an early warning to big moves ahead as USD/EM and EUR/EM cannot co exist as the present situation.

USD/RON 4.2236 Vs EUR/RON 4.9497 contains EUR/RON as a higher exchange rate and both are massive overbought. Despite a 700 pips separation, RON and MYR are the better currencies to trade EM markets as both RON and MYR exchange rates begin with a 4 handle.

USD/CNY 6.3667 Vs EUR/CNY 7.5796, USD/DKK 6.3443 Vs EUR/DKK 7.4362, USD/MXN 20.0550 Vs EUR/MXN 23.5046, USD/ZAR 14.9641 Vs EUR/ZAR 17.5364.

USD/TRY 8.8836 Vs EUR/TRY 10.4120.

USD/SEK and USD/NOK contain exchange rates to begin with an 8 handle and the same exact currency as USD/TRY for triple trades.

A few exceptions exist to EM markets as worthy trades this week: USD/BRL overbought to oversold EUR/BRL and compliance to EUR/USD and USD for G28. Overbought USD/CZK Vs oversold EUR/CZK, overbought USD/HRK Vs oversold EUR/HRK. Overbought USD/KRW vs oversold EUR/KRW.

Problem pairs include PLN, MXN, HUF, MYR, CNY, RON, TRY and ZAR.

Further to the 2000 pip separation and overbought to oversold readings to EUR/EM and USD/EM. Reverse exchange rates factored to interest rates reveals the same overbought and oversold readings. Its impossible to trade the ranges as factored and both USD and EUR exchange rates are problems. Normally, by factor to reverse exchage rates, great trades exist for USD/EM and EUR/EM as ranges and vital levels are known in advance.

Take USD/CAD for example. Today's range by reverse exchange rates factors to 1.2554 to highs at 1.2682. The calculation is the result to ranges from USD/CAD to CAD/USD. This simople factor doesn't work for EM currencies as it normally does week to week.

EUR/EM and USD/EM normally factors as 2 distinctly separate ranges and trade able currencies for weekly trades.

Trading currencies and other financial instruments carries a degree of loss and possible loss of entire investments. Please managed your own risks, stop loss, and margins requirements.

Feed news

How do emotions affect trade?
Follow up our daily analysts guidance

Subscribe Today!    

Latest Forex Analysis

Latest Forex Analysis

Editors’ Picks

EUR/USD jumps to three-week highs near 1.1650 amid falling dollar, yields

EUR/USD is trading close to 1.1650, recovering ground to clinch three-week highs. The pair cheers risk-on mood-led decline in the US dollar. Treasury yields pullback, as poor US industrial data tempers hawkish Fed’s expectations. Focus on ECB and Fedspeak.


GBP/USD: Upside needs validation above the descending trendline near 1.3780

GBP/USD edges higher on Tuesday in the Asian trading hours. The pair faces strong resistance near the 1.3770-1.3780 zone below the bearish slopping line. MACD signals upside momentum with the underlying bullish sentiment.


Gold eyes $1,780 amid recent USD weakness

Gold prices lock in some fresh gains above $1,770 amid a recent pullback in the greenback. The US benchmark Treasury yields trade lower at 1.57% with 0.57% losses, which weigh on the greenback.  A lower USD valuation enhances the appeal of the precious metal for the other currencies holders. 

Gold News

Litecoin on the cusp of 26% breakout

Litecoin price is on the penultimate leg of a technical formation that will catalyze a quick bull rally. LTC needs to clear one critical hurdle to kick-start a run-up to levels last seen more than a month ago. Litecoin price has been on a slow but steady uptrend since Oct 13.

Read more

Netflix Stock Price and Forecast: When are NFLX earnings?

Netflix stock falls nearly 1% on Friday ahead of earnings. NFLX releases earnings on Tuesday, October 19, after the close. Netflix stock has been boosted by the success of Squid Game.

Read more