The question to the Gold standard was based on speculation from many variables

Brian Twomey Brian's Investment

The question to the Gold standard was based on speculation from many variables. The first is the free float to interest and exchange rates trades in year 52 from 1972. Since 1694 and the creation of the BOE as the first central bank, markets change trading arrangements every 50 years. Since 1694, Gold, Silver and Gold/ Silver standards traded, Bretton Woods and 1% trade bands, exchange rate Fixes.

Since the 1972 free float and 52 years, Inflation at the 2% level experienced 18 positive years and 34 horrid years. The record for central banks to fight Inflation severely underperformed. The Fed to include Greenspan demonstrated the wrong time, level and duration to raises and drops to interest rates in order to effectively fight Inflation.

Greenspan was no different than Powell, Bernanke and Volker. In 19 years, Greenspan dropped interest rates 37 times at 1225 points to 31 raises at 850 points. Wide swings in interest rates also offers large deviations to money supplies and an unstable price system.

Franklin Roosevelt under the Gold Standard from 1933 to 1944 experienced 5 good years of low Inflation while 5 good years existed from 1914 to 1933.

The market conversation is Trump favors a Gold Standard to base money supplies and force government spending constraints.

The market argument to the Gold Standard particularly under a Bretton Woods trade arrangeent means markets fail to trade. Every 3 months, exchange rates change to endure for the next 3 months.

We're practically under a no trade arrangement today based on Gold Standards. EUR/USD and USD/CHF traded a range of 200 pips in the past 6 weeks. At 200 pips per month translates to 10 pips per day over 20 trade days.

Next week

EUR/USD next break is located at 1.0902 to trade a range from 1.0902 to 1.1054. Overbought and short begins at 1.0860's. Current range trades 1.0828 to 1.0902 and bottom at 1.0774.

GBP/USD trades 1.2624 to 1.2653 then 1.2653 to 1.2691. GBP/USD trades deep overbought at 1.2691 and 1.2714. Shorts target 1.2639 then the resolution at 1.2624.

GBP/NZD must break 2.0841 to target 2.0650 and 2.0633. Next levels: 2.0919 and 2.0880.

EUR/NZD must break 1.7876 to target 1.7741. Longer term targets 1.7537, 1.7455 and 1.7395.

GBP/AUD trades massive oversold and targets 1.9254 next week. Longer term GBP/AUD targets 1.8884, 1.8772 and 1.8764.

EUR/AUD next week targets 1.6522. Longer term EUR/AUD targets 1.6283, 1.6190 and 1.6069.

USD/MXN trades deeply oversold and targets 16.7652 and 16.7974. Higher must break 16.8943 to target 16.9589 and 17.0235.

USD/JPY

For next weeks: 152.77, 152.58, 152.15, 152.05, 151.89, 151.70, 151.13, 150.69. Next week break 151.13 targets 150.38..

GBP/JPY break 181.34 targets 190.12. EUR/JPY targets 162.87 on a break 163.71.

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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