Inside the currency market: EUR/USD vs USD/JPY

Brian Twomey Brian's Investment

Both EUR/USD and USD/JPY correlate at negative 93%. EUR/USD and USD/JPY prices separate by a range of 84 pips. USD/JPY is deeply oversold from 114.37 and a 3 pips drop in 2 trade day. USD/JPY traded 56total pips or 44 pips lower and 12 pips higher.

EUR/USD traded 1.1388 to 1.1288 or 100 pips or 70 pips higher and 30 pips lower. EUR/USD achieved target as written Sunday at 1.1388.

USD/JPY 100 day average is located at 114.53 and trades between the 50 and 100 day from 114.53 to 115.02. While EUR/USD's price is to low to record even the 5 day average. EUR/USD highest price is found at the 100 day average at 1.1321 and 50 day at 1.1337.

USD/JPY at current 114.72 is in a dangerous position. Longs at current price could find losses if 114.37 breaks lower. Longs however may find terrifc profits from 114.72 to target at 115.57.

USD/JPY trades in an 84 pips range without a significant level in between. Remaining levels are minor and fairly insigificant.

EUR/USD is deeply oversold and DXY at 96.25 is far to high in relation to 97.00 and 98.00 multi year tops.

USD/JPY longs for today are located at 114.45, 114.50 and 114.57 and targets 115.03.

For USD/JPY, 4 numbers and only 4 numbers drive prices until 9:00 am or 3:00 pm Europe: 114.16, 114.45, 115.03 and 115.32. Today, 114.37 may or may not hold.

EUR/USD 4 numbers drive EUR/USD: 1.1249, 1.1277, 1.1334 and 1.1363.

EUR/USD 1.1249 = USD/JPY 115.32. EUR/USD 1.1277 = USD/JPY 115.03. EUR/USD 1.1334 = USD/JPY 114.45. EUR/USD 1.1363 = USD/JPY 1.1416.

EUR/USD shorts are located at 1.1334 and 1.1363 to target 1.1313 then 1.1277. EUR/USD longs are located at 1.1249 and 1.1277 to target 1.1334.

Overall, 114.37 is expected to hold this week which means we could target USD/JPY as a long only strategy to achieve 115.57 then reverse to shorts rather than allow 80 pips to fly by without profits.

Why the EUR/USD match to USD/JPY is due to each pair as perfect opposites. The difference is USD/JPY's decimal point was moved.

As an aside issue. Time springs forward March 13 by 1 hour. This means day trades change for the next 6 months to 2:30 am to 10:00 am and nightly trades from 9:30 pm to 2:30 am. Day trades run as usual 12 1/2 hours from a total of 24.

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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