FX weekly: Inflation vs. Fed funds, GDP, and 14 currency levels and targets

Currency market prices this week are trapped within 200 pip ranges. EUR/USD for example trades 1.0793 to 1.0950,

GBP/USD 1.2572 to 1.2776, AUD/USD 0.6580 to 0.6735, NZD/USD 0.6040 to 0.6225.

DXY trades 103.66, 104.60 to 106.58. USD/JPY trades 157.05 to 154.42. GBP/JPY 197.61 to 194.19.

EUR/USD 200 pips must  trade in ranges from 1.0950, 1.0886, 1.0869, 1.0835 then target 1.0821 and 1.0814.

Overall, EUR/USD since December traded 1.1100's at the 5 year average to 1.0600's or 500 pips. EUR/USD at 1.0800's is fairly dead center and well balanced to the 500 pip range.

The DXY same 500 pip range since December is seen from 101.00 to 106.00's. The explanation to the 500 pip range is Inflation and Inflation serves as the Anti interest rate  rate to lower or raise interest rates.

Inflation vs Fed funds

Inflation since December traded 3.4 to 3.1 as 0.3 or an 8% decrease as a rate of change then Inflation traveled  0.4 from 3.1 to 3.5 or a 12% rate of increase.

The driver to markets and the 500 pip range  since December is the Inflation rate. The driver to markets for 2024 - 2025 is the Inflation rate.

Inflation at 3.0 begins oversold then a bounce is expected to remain within the 3.1 to 3.5 range. The current range is well within the current 2.00 target to 4.1 average. Holding the 3.0 to 4.0 range is the expectation to the Core Inflation rate at 2.5 to 3.0 and forecasted to hold into 2025.

GDP at current 1.6 trades oversold however the higher rate expected will always trade below Inflation.

Opposite correlations to Inflation and Fed Funds is a permanent fixture to markets, prices and movements. Any Fed cuts to interest rates automatically drives Inflation higher. Market price actions are always met by opposite and equal reactions. Fed Funds nor Inflation wanders in the unknown and allowed to travel to unknown levels.

The concept to multiple rate cuts was an impossibility from either specific Fed Funds or Inflation averages or factored as Correlations from averages 1 to 5 years and beyond. Evidence to the data informed.

The week

USD/JPY targets 154.42.

GBP/USD supports 1.2565, 1.2572 and 1.2585 Vs 1.2622. The 1.2605 and 1.2595 target is located at the 1.2622 break.

AUD/USD 0.6575 to 0.6733.

NZD/USD 0.6034, 0.6224, 0.6407

EUR/AUD 1.6410, 1.6155, 1.6004

GBP/AUD 1.9113, 1.8759, 1.8533

EUR/NZD 1.7882, 1.7483, 1.7244

GBP/NZD 2.0827, 2.0301, 1.9970

USD/CAD 1.3628, 1.3379, 1.3258, 1.3161

GBP/CAD 1.7123, 1.7097, 1.7016, 1.6921, 1.6873