Brian Twomey
Brian's Investment
Current Fed Funds rate trades 0.05 from a successive drop over last days from 0.07 then 0.06. Rare for the Fed to change Fed funds and more rare to adjust quickly with a dramatic move. Current 0.05 trades close to SOFR and Repo rates at 0.01. Fed Funds from 0.05 contains 1 direction and its up back to next 0.06 then the current normal 0.07.
While 2 points appears meaningless, its quite dramatic to the DXY Vs EUR/USD relationship. For the EUR/USD and DXY, daily support and resistance points changed at 0.07, 0.06 and now 0.05. It quite natural for support and resistance points to change daily and this is the constant for daytrades but interest rates answers the question exactly where are support and resistance points located and how much was the daily change.
The lower goes Fed Funds then the higher goes the averages. The higher goes the averages then the more EUR/USD drops and DXY and USD rises. Overbought and oversold prices are much more than a simple mathematical computation. Its viewed from interest rates and seen daily by the experienced human eye.
Most vital point to offer is up and down prices for any currency pair and every market financial instrument contains massive differences as each requires a separate computation.
DXY
From 0.05= Support = 89.33, 90.14 Below Vs above Resistance = 92.83 and 93.28.
From below 0.06 = Support = 89.48 and 90.34 vs Resistance = 92.65 and 93.12.
From 0.07 = 89.63 and 90.39 Vs 92.54 and 92.97.
Change from the first set of supports changed overall by - 30 pips, the 2nd supports changed by -20 while above resistance points changed by +29 and +31 pips.
From each day at 0.07, 0.06 and 0.05, the first supports dropped by 15 pips per day. The second set of supports changed by 20 and 5 pips per day.
The first set of resistance rose by 11 and 18 pips. The last set of resistance points rose each day by 15 and 16 pips.
Overall range to supports and resistance points expanded from 34 pips at 0.07, then 64 pips from 0.06 and 39 pips from 0.05. As Fed Funds lowered then overall ranges expanded to create a wider trade range. At 0.06 and 64 pips, the Fed had no choice except to change to either 0.05 or 0.07 due to the wide range. DXY at 64 pips exceeds the daily overall trade range and beats the EUR/USD trade range.
EUR/USD
From 0.05 = Supports 1.1776 and 1.1834 Vs Resistance 1.2236 and 1.2297.
From 0.06 = Supports 1.1796 and 1.1856 Vs Resistance 1.2213 and 1.2276.
From 0.07 = Supports 1.1815 and 1.1871 Vs Resistance 1.2198 and 1.2256.
From the first set of supports from 0.07 to 0.05, the change overall was - 39 pips and -31 pips for the 2nd supports.
Daily for the change at the first set of supports was minus 19 then 20 pips. The second set of supports changed daily by + 15 and + 22 pips.
daily Resistance points changed overall by +38 and +41 pips.
Daily for the change at the first Resistance point was + 15 and +23 pips.
Daily for the change at the 2nd Resistance point was +20 and +21 pips.
The positive and minus aspects represent EUR/USD and USD/EUR.
AS EUR/USD rises then USD/EUR drops. As USD/EUR rises then EUR/USD drops.
Only 19 points of EUR/USD daily pips trade Vs USD/EUR. For USD/EUR is the exact same pair as DXY with a difference as DXY exceeds USD/EUR ranges by 4 pips. Explains why its imperative to factor USD/EUR for exact supports and resistance points.
From 0.07 to 0.05, EUR/USD ranges dropped and expanded as USD/EUR.
USD/EUR
From 0.05 = Supports 0.8130 and 0.8171 Vs Resistance 0.8448 and 0.8491.
From 0.06 = Supports 0.8145 and 0.8186 Vs Resistance 0.8433 and 0.8476.
From 0.07 = Supports 0.8158 and 0.8196 Vs Resistance 0.8422 and 0.8462.
The first set of supports = minus 28 pips and minus 25 for the 2nd set.
The first set of resistance = +26 and +29 pips.
EUR/USD
Daily EUR/USD supports since the Sunday open as 59 and 44 pips. While today calculates as 32 and 25 pips. The 25 pips derived from USD/EUR and 32 factors to EUR/USD.
Supports and resistance points change constantly and never remain the same from day today. Interest rates are the driving factor and force the change. To know interest rates is to know where exact locations to support and resistance.
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.
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