TRENDING:

XAU/USD

Silver

EUR/USD, G10, November V December

Brian Twomey Brian's Investment

The assumption the currency price is a random object that floats in a lost galaxy and awaits buyers and sellers in a supply and demand tug of war to offer a direction is a complete fallacy. Longs lost to the shorts because more shorts existed than longs assumes currency markets are wholesale purely chaotic, no order, purely stupid and a pure gamble. Currency price A ended at X price as a result of buyers and sellers assumes the X price ended at the last tug of war battle royal between longs and shorts. A winner and loser must emerge.

The reality is a currency price knows exactly its destination and knows exactly how to achieve its objective long before any buyer or seller enters the market. Buyers and sellers, number of participants and money amounts cannot change the price target destiny. The price may knock itself off course but the price path must by mathematical law resumes its destination and target. Mathematical law is what allows the currency price and currency pairs its highly sophisticated classification as an extremely smart market under an import / export business model and inter relationship to currency prices.

Name the currency pairs 1.1317, 1.1304, 1.1354 and 1.1344. AUDCAD provides a 1.0299 floor to AUD/NZD while AUD/NZD provides a 0.9400 floor to AUD/CAD. The interrelated examples to a far more sophisticated market than many imagine go on and on. The currency pairs are EUR/USD, EUR/CHF, CHF/JPY 113.54 and USD/JPY 113.44.

Last month was mentioned the deep division between USD and Non and this deviation would experience USD/JPY and JPY cross pair neutrality. For the month of November, with the exception of NZD/JPY, all JPY cross pairs ranged from a 121 pip low in CHF/JPY to a 230 pip high in CAD/JPY while USD/JPY ranged 111 pips. Even high flyer GBP/JPY traveled a paltry 120 pips from 144.50 to 145.79.

USD/CHF and CHF cross pairs mentioned won't perform except to range trade. Correct again for November as USD/CHF traded 70 pips while AUD/CHF and CAD/CHF were best performers at 212 and 213 pips followed by GBP/CHF at 144 pips and EUR/CHF at 94 pips. Weeks ago was posted NZD/CHF as not only a problem pair but it won't perform and it moved 7 pips all November.

Before cross pairs are able to move again with any alacrity, the deep division between USD pairs and non USD pairs must move closer to the center otherwise December will resemble the tiny trading ranges of November. EUR/USD and GBP/USD must travel higher while USD/CAD and USD/JPY must trade lower. As always stand aside to USD/CHF.

USD/CHF was born, designed, constructed as a purposeful dead range currency price so to allow CHF cross pairs to perform their intended purpose as protectors to the USD V Non currency pair division. GPP/USD and EUR/USD can only travel so far until GBP/CHF and EUR/CHF stops both dead from traveling to high or to low. AUD/CHF and NZD/CHF were designed a complement pairs to AUD/USD and NZD/USD while CAD/CHF is the signal pair to overall CHF crosses as much as CHF/JPY is signal pair to JPY cross pairs.

JPY cross pair range trading for November resulted in problem pair status for EUR/JPY, GBP/JPY and CAD/JPY while AUD/JPY sits on the edge. Problem pair means prices must move as pure noise exists inside prices. GBP/JPY long is the only pair up for consideration in the mix although work is yet completed on AUD/JPY. I recommend stay clear EUR/JPY and especially CAD/JPY because USD/CAD and CAD/CHF are seriously off kilter for all November. Again inter relatedness, if 1 or 2 pairs are off kilter then all pairs are knocked off sync.

Our plan of attack for December is the same as November, heavy GBP as in GBP/USD, GBP/JPY, GBP/CAD and especially GBP/CHF while GBP/NZD and GBP/AUD is excluded. Non performer EUR/CAD is replaced with NZD/CAD and in search of replacement to dead mover EUR/AUD. We're heavy EUR/USD, EUR/CHF and USD/CAD while no thrills exist in EUR/NZD. The USD and NON division forces deep selectivity.

Break points, most vital for higher , lower.

EUR/USD 1.1466 and falling,

EUR/JPY 129.05 and not thrills here.

EUR/CHF 1.1394

EUR/CAD 1.5079, shorts only is the way.

EUR/NZD 1.6961 and no thrills here either.

EUR/AUD 1.5775, short is the only trade.

EUR/GBP 0.8852 and stand aside as deep problem pair status reigns upon EUR/GBP.

GBP/USD 1.2753

GBP/JPY 145.79

GBP/CHF 1.2873

GBP/CAD 1.7034

GBP/NZD 1.9160

GBP/AUD 1.7821

USD/CAD 1.3162

CAD/JPY 85.58

CAD/CHF 0.7556

CAD/ZAR 10.61

AUD/USD 0.7269

USD/JPY 112.57

AUD/CHF 0.7224

AUD/JPY 81.81

AUD/CAD 0.9560

AUD/NZD 1.0750

NZD/USD 0.6762

NZD/CHF 0.6721

NZD/CAD 0.8895

NZD/JPY 76.12

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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