Brian Twomey
Brian's Investment
NZD/USD and NZD cross pairs are a divergent set of currency pairs among EUR, GBP, AUD and JPY counterparts and operates / trades on its own terms within its own universe. The main pairs NZD/USD, NZD/CHF and NZD/JPY trade and are permanently contained between NZD/CAD at the top and NZD/EUR at the bottom as follows using 2 week old closing prices:
NZD/AUD 0.9597
NZD/CAD 0.8533
NZD/JPY 0.7058
NZD/USD 0.6430
NZD/CHF 0.6327
NZD/EUR 0.6941
NZD/GBP 0.4937.
The arrangement is the exact same agreement as GBP/USD and cross pairs as exchange rates trade within their own separate universe although NZD/USD and NZD/CHF forever remain in contention against each other as it pertains to exchange rates predict exchange rates. The NZD composition is the exact same as AUD yet much different from EUR and GBP and due to the position of EUR/CAD and GBP/CAD and CAD positions.
While AUD/CAD and NZD/CAD serve as tops in the AUD and NZD universe, GBP/CAD and EUR/CAD are positioned as neutral currencies within the GBP and EUR complex. Above GBP/CAD and EUR/CAD as next currencies are wide rangers EUR/NZD and EUR/AUD Vs GBP/NZD and GBP/AUD.
To demonstrate by GBP example and to highlight CAD's position, NZD/ISD and NZD/CHF off kilter neutrality, here's GBP line up and the GBP set up is the eact same as EUR.
GBP/CHF, GBP/USD, GBP/JPY , GBP/CAD, GBP/AUD and GBP/NZD.
GBP/CHF, EUR/CHF and AUD/CHF are bottom currencies and always wider range movements by design to GBP/USD, EUR/USD and AUD/USD. The purpose of GBP/CHF, EUR/CHF and AUD/CHF is to contain on purpose movements to GBP/USD, EUR/USD and AUD/USD as ranges by design are much shorter than its CHF counterparts. CHF wide ranges also ensures counterpart currencies maintain their respective trading space but also never to trade to zero. CHF is the currency market protection currency.
GBP/CHF, EUR/CHF and AUD/CHF also serve as bottom protectors to the overall GBP, EUR and AUD universe as GBP/USD, EUR/USD and AUD/USD can't ever trade below CHF counterparts. As GBP/USD rises or falls so then does GBP/CHF and as GBP/CHF rises or falls so then does GBP/USD.
GBP/USD, EUR/USD and AUD/USD then become neutral currency pairs by design within the overall universe yet locked between CHF and JPY counterparts and movements are contained between 2 wide range currency pairs, CHF and JPY.
What separates NZD/USD and NZD/CHF from its GBP, EUR and AUD counterparts is both are allowed an equal chance as bottom currency positions because allowable movements are always equal or close to equal. Bottom currency difference is either pair may serve as neutrality and second divergence is which pair as bottom factors a distinction to forecast NZD pairs as exchange rates predict exchange rates.
NZD currencies are bottoms and smallest currencies to well over 60+ currency pairs therefore NZD overbought / oversold becomes a signal currency to higher exchange rate pairs.
What overall neutrality means and why for GBP/USD, EUR/USD, AUD/USD and NZD/USD is reciprocal currencies as USD/GBP, USD/EUR, USD/AUD and USD/NZD contain wider ranges than counterparts. This wide range scenario forces not only neutrality but ensures trading spaces won't violate. For NZDUSD lower ranges ensures NZD/USD is allowed movements to a certain point then it stops the rise or fall.
Exchange rates predict exchange rates applies to which currency pairs to factor against each other to determine in weekly trades exact tops, bottoms, entries and exits. Its the perfect trade as it derives from exact exchange rates however every currency pair is different to the result and procedures to forecast tops, bottoms, exits and entries. To apply the concept is not only simple but takes literally minutes to obtain an accurate forecast.
While NZD/CAD and AUD/CAD serves as tops to NZD/USD and AUD/USD, GBP/CAD and EUR/CAD are neutral pairs and positioned as middle currencies to separate the distribution from low range movements to higher range pairs. Middle and neutral currency pairs are designed not to move as widely as counterparts as the name of the game is containment. Currency prices are designed not to move widely.
Above EUR/CAD and GBP/CAD are higher range pairs EUR/AUD and GBP/AUD Vs EUR/NZD and GBP/NZD.
How the distributions align determines high or low movements. Many instances, 1 or 2 currencies within the universe are identified as problem pairs as prices maybe to high or low. Problem pairs disrupts overall price movements to counterpart pairs. EUR is a classic example to problem pairs and prices. The last time all GBP currencies traded perfectly was last February during most volatile trading against Brexit news. Prices traded smoothly and normally.
Perfect alignments to exchange rates are questions to Correlations and ranges. Explains problem pairs Vs uniform price movements.
Last week's trading experienced uneven prices among currency pairs to inform problem pairs and non normality existed. NZD is a classic normally traded distribution and rarely are problem pairs existent.
NZD serves its purpose in the currency pair line up by establishing daily interest rates for the remainder of the world's central banks and currencies. And NZD obtains its interest rates from the Fed. Its a 24 hour system and completes everyday from the Fed to RBNZ then distributes to the world's central banks. The Fed and interest rates set the world standard while NZD and the RBNZ carry on the daily interest and exchange rate conventions since the 1972 free float.
NZD as exchange rates predict exchange rates forecasts NZD/JPY the most at 11 times, NZD/CHF at 6 times, NZD/USD at 4 times and NZD/CAD 9 times. Best and most accurate forecasts are clearly NZD/JPY.
The purpose for NZD/AUD is a prediction currency to forecast bottoms in NZD/JPY, NZD/CHF and NZD/USD. NZD/GBP serves no real function as a forecast currency nor to forecast from NZD as the distance is to far to all NZD pairs.
Subtract the perfection seen in NZD/JPY, the vast majority of NZD pairs forecasts exact and solid tops and bottoms. And the majority to the NZD universe consist of the main 3 as NZD/CHF, NZD/USD and NZD/JPY.
Only target trading is located in NZD/JPY while remainder NZD pairs lack ability as exchange rates to forecast targets. The best is forecasts to tops and bottoms which may serve as boundaries rather than targets. The overall message to NZD is a range rather than a trend currency. A trend currency such as EUR and GBP easily forecasts targets as well as tops and bottoms.
Here's how NZD operates:
NZD/USD predicts NZD/JPY tops and bottoms.
NZD/JPY predicts NZD/CHF and NZD/JPY bottoms.
NZD/CHF predicts NZD/JPY shorts.
NZD/CAD predicts NZD/CHF NZD/CHF top and NZD/JPY bottom.
NZD/AUD predicts NZD/USD top and NZD/CHF botom.
NZD/EUR predicts NZD/JPY tops and bottoms.
Reciprocals
NZD/CHF predicts NZD/JPY tops.
NZD/USD predicts NZD/JPY top.
NZD/CAD predicts NZD/USD and NZD/CHF bottoms.
NZD/AUD predicts bottoms to NZD/JPY, NZD/USD and NZD/CHF.
NZD/JPY predicts NZD/USD and NZD/CHF tops
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.
Editors’ Picks
EUR/USD climbs to daily highs near 1.1820
EUR/USD now picks up pace and advances to the area of daily peaks north of the 1.1800 barrier at the end of the week. The pair’s decent move higher comes against the backdrop of a generalised lack of direction in the FX galaxy and the mild offered stance in the US Dollar.
GBP/USD trims losses, retests 1.3460
After briefly challenging its key 200-day SMA near 1.3440, GBP/USD now manages to regain some balance and revisit the 1.3460 zone on Friday. Cable’s pullback comes as the selling pressure on the Greenback gathers traction, reigniting some recovery in the risk-linked space.
Japanese Yen gives back half of early gains against USD ahead of US PPI data
The Japanese Yen (JPY) surrenders half of its early gains against the US Dollar (USD) during the European trading session on Friday. The USD/JPY pair rebounds to near 155.90 as the JPY falls back, but is still 0.15% down.
Editors’ Picks
EUR/USD: Fed calm, ECB steady, but the Dollar still leads Premium
EUR/USD is still struggling to find real traction. The pair has tried to stabilise, but momentum keeps fading, leaving the door open to further weakness.
Gold: Falling US yields, geopolitics help XAU/USD hold ground Premium
Gold (XAU/USD) gained traction and climbed above $5,200, ending the fourth consecutive week in positive territory. The next round of US-Iran talks and crucial macroeconomic data releases from the US will be watched closely by market participants in the short term.
GBP/USD: Will Pound Sterling defend key 1.3450 support ahead of US jobs data? Premium
The Pound Sterling (GBP) entered a bearish consolidation phase against the US Dollar (USD), after having tested critical support near the 1.3450 level on several occasions.
Bitcoin: Another month of losses, and it’s been five
Bitcoin (BTC) price is stabilizing around $68,000 at the time of writing on Friday, but the Crypto King is poised to close February on a fragile footing, marking its fifth consecutive month of losses since October and a rare start to the year with back-to-back monthly corrections.
US Dollar: At a crossroads; Fed steady, tariffs in flux Premium
The US Dollar’s (USD) upward momentum from the previous week seems to have encountered a tough nut to crack in the 98.00 region, as measured by the US Dollar Index (DXY).
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