From last week, DXY became overbought in the middle 105.00s and oversold at 103.90’s. DXY traded 104.12 lows and traveled to 105.88 highs into massively overbought territory. DXY remains severely overbought with limited upside potential and every ability to trade 103.00s.
USD/JPY’s big line break this week at 135.45 traded to 135.35, then 137.90 highs. USD/JPY was deeply overbought at 137.00’s but allowed to travel a few pips higher due to DXY overbought to overbought status.
A gamble trade to 137.00s is the same as saying overbought USD/CAD must travel to more overbought at 1.3800s to accommodate USD/JPY at 137.00s. The more accessible and profitable trade was long USD/JPY from vital 135.45 to just under 137.00’s, then short at the highs.
USD/JPY began this week: 136.06, 136.59, 137.64. USD/JPY begins next week: 136.19, 136.69, 137.68. USD/JPY’s averages changed, but USD/JPY’s position remains constant with no change status. The big break for the lower is now 135.69.
EUR/USD is trading around vital 1.0559 Vs. the next level below 1.0519. Limited upside exists to DXY as limited downside exists to EUR. EUR/USD next week will trade 2 X’s DXY.
GBP/USD is oversold from vital 1.1992 and 1.2500’s. GBP/USD could travel to the low 1.2100s next week and EUR/USD to 1.0700s.
From last week: GBP/JPY shorts at low 164.00’s targets low 163.00’s until the break at 162.68. GBP/JPY traded at 163.84 to low of 163.00, then the break materialized at 162.68 and traded to 161.60 lows. Higher for GBP/JPY must clear 162.62.
GBP/JPY is inching closer to the 159.21 targets. This means all JPY cross pairs trade much lower for about another 300 pips as GBP/JPY will take all JPY cross pairs lower.
Deeply oversold AUD/USD has every potential to trade middle 0.6700’s next week and NZD/USD to high 0.6181 and 0.6199.
AUD Vss RBA
AUDUSD Actual 52 pips Vs 34
AUDEUR 29 pips Vs 32
AUDGBP 29 Vs 28
AUDJPY 66 Vs 46
AUDCAD 60 Vs 46
AUDNZD 44 Vs 54
AUDCHF 32 Vs 32
Overall, currency markets are slowly moving to the next level of the slowdown of prices in a brand new regiment of price movements. Slowing the currency price means a severe adjustment to slower stock index prices and every market instrument on the planet.
Trade of the week for EUR in the EM category is EUR/PLN long to target easily 4.7014 from 4.6820.