FX weekly: Rate drops, RBNZ, NZD/USD and 14 currencies

Week 10, EUR/USD traded 69 pips to DXY 47,  GBP/USD 99 pips and 164 for USD/JPY.  Markets remain in severe compression mode by the strangulation of averages. The RBNZ in the February Monetary Policy report stated best to the conditions today.  Most major central banks view their current monetary policy stances as restrictive. 

More than a view, Money supplies remain on the floor for all central banks while headline interest rates are miles to high. Overnight rates are stuck in the middle going nowhere and informs to no rate changes due to stubbornly high Inflation rates. 

The RBNZ and RBA both stated possible rate rises are necessary. The RBNZ and RBA confirms the same analysis as applied to the Fed to a possible rate rise. Core Inflation appears to hold progress for further Inflation reductions. 

Shipping and transport costs are the new features to high Inflation as well as WTI at $79 and $83 for Brent. Neither are assisting to lower Inflation rates and add to higher import costs. More importantly, the demand for goods are weak. Nobody wants what nations are selling until money supplies loosen. The recipe for higher Inflation or at least stable rates at current levels is baked inside today's economic dilemma.

Central banks desperately require a rate drop to raise money supplies and GDP to force markets to move again. Central banks are currently factoring 75 point drops by middle year to November.  The RBNZ anticipates a 45 point drop for the RBA. RBNZ Swap rates at the 3 year stands at 4.72. Far outside the 180 day average informs not much confidence exists to rate drops anytime soon. 

The value to  the RBNZ and NZD/USD is NZD/USD contains the lowest exchange rate among 60 nations yet the RBNZ interest rate at 5.50 aligns against the Fed's top range from 5.25 to 5.50. RBNZ at 5.50 is highest among all the Eurozone, BOE, BOC, SNB, Sweden, Denmark, RBA, Israel, Norway, Japan, China, Malasysia, Thailand, Taiwan, South Korea. 

Most nations above are trade partners to New Zealand and sit inside the RBNZ's Exchange Rate Index as the TWI. The RBNZ and Fed are 2 most vital nations to monitor interest rate changes. 

Weekly

Overall, expect another average trade week as seen in the past 10 weeks. 

JPY last week

GBPPY targets 189.25, Lows 189.06.   EURJPY,Targets 161.82, lows 161.70.  CADJPY Target 110.51, Lows 110.13

USDJPY targets the break below 149.85, Lows 149.21

Weekly

EUR/USD Vs DXY

EUR/USD trades above 1.0827 and DXY below 103.94. DXY begins the week between 2 vital points at 103.94 to 103.87. EUR/USD trades overbought at any price above 1.0853. DXY lower must break 103.64, 103.52, 103.45. 103.16 and 102.80. 

The EUR/USD and DXY relationship holds progress to larger moves and wider ranges. We're short above 1.0853. 

USD/JPY

Larger range 164.34 to 136.99. Levels: 153.12, 151.87, 150.98, 150.20, 149.90, 149.11 ,148.66,  148.24, 147.03. 

Weekly target 149.12 and vital break for lower at 148.66. 

GBP/JPY targets 189.42 and EUR/JPY 161.74. CAD/JPY Targets 110.27 and lower 110.02.

GBP/NZD targets the break at 2.0634 and EUR/NZD 1.7701.

Overbought EUR/AUD targets the break at 1.6541 and GBP/AUD 1.9281 by levels at 1.9366, 1.9324 and 1.9302.

AUD/USD and NZD/USD trade deeply oversold short, medium and long term. 

GBP/USD vital below 1.2643 and 1.2621. Overbought begins at 1.2701.

GBP/CHf and EUR/CHF both trade deeply overbought.

GBP/CAD and EUR/CAD Both begin the week massive overbought. Watch AUD/CAD 0.8842 for shorts and NZD/CAD 0.8263. 

GBP/USD universe trades overbought to GBP/CHF, GBP/JPY, GBP/CAD, GBP/NZD, GBP/AUD

EUR/USD overbought to EUR/CHF, EUR/JPY, EUR/AUD, EUR/CAD, EUR/NZD. 

USD/CAD begins the week overbought. Watch CHF/JPY 169.31 to break and target 168.46 and 167.82.