AUD/USD over the past five days, traded between 61 and 120 daily pips. Wednesday and Friday were the best days at 100 and 120 pips. Monday, Tuesday, and Thursday, AUD/USD moved 87, 61, and 58 pips.
AUD/USD last week managed to break higher last Wednesday at vital 0.6971 and traded 60 pips to 0.7031. AUD/USD 60 of the 100 pip days on Wednesday was covered. AUD/USD Friday broke below 0.6993 and traded 81 pips to 0.6912.
AUD/USD assistance higher was derived from an oversold EUR/AUD and a 300 pip drop from 1.4800’s to 1.4500’s to trade deeper degrees of oversold.
AUD/USD trades its best days and movements when AUD agrees to AUD/EUR. AUD/EUR all last week traded overbought then to a higher degree of overbought from the EUR/AUD drop.
Instead of a meaningful correction to AUD/USD, higher was the only option. AUD/EUR remains massively overbought against a deeply oversold EUR/AUD.
AUD/USD’s best days traded last week resulted from vital MA breaks, while the three dead days AUD/USD was caught between the AUD/EUR and EUR/AUD crossfire. The crossfire left AUD/USD paralyzed.
AUD/USD closed at 0.6986 against the most vital 0.6993. The AUD/USD break last week on Wednesday at 0.6971 corresponded to USD/CAD break below 1.2875. AUD/USD and USD/CAD were the first and only currencies among the USD V Non USD to break significant averages.
AUD/USD vs the AUD universe trades as oversold AUD/CHF, Neutral to AUD/JPY, Neutral to oversold AUD/CAD and overbought AUD/NZD. Overbought AUD/NZD informs lower AUD/CAD as AUD/NZD is the same currency as AUD/CAD, only shown in the reciprocal format to exchange rates.
Overbought AUD/NZD and AUD/EUR are a driver for AUD/USD this week. AUD/USD contains two options this week. Above 0.6993 targets higher at 0.7080’s or longs from 0.6887 to 0.6913.
Overall, AUD/USD sat last on the 20 trade rank list due to dead ranges from small movements last week. Better trades exist.
The Week Ahead - DXY
As written last week, DXY targets 105.69 at the lows. DXY traded to 105.61 and ranged its 200 pips from 107 to 105.00’s. DXY this week will trade the same 200 pip ranges from 107.00’s to 105.00’s.
DXY averages above are building to prevent 107.00’s from trading. Vital points are located at 106.10, 106.52, and 106.94. Break at 105.47 targets 105.15 then long.
As DXY trades lower, more averages will build against DXY higher. But most importantly, against all USD pairs from trading higher. DXY lower is positive to long EUR/USD, GBP/USD, AUD/USD and NZD/USD.
DXY will eventually break 105.00s to trade between 105.00s to 103.00s. Next week appears as the most suitable time.
Respectful advice is never to dismiss DXY from overall forecasts as DXY is vital and commentates overall markets. DXY 200 pip ranges inform the market will remain stable and trade relatively normal moves for months in the future.
DXY averages building against higher levels coincide with EUR/USD seasonality from June to November/ December. EUR/USD seasonality means EUR/USD trades at its highest yearly levels from June to November/ December.
EUR/USD Vs. USD/JPY
EUR/USD's big break for a higher move is at 1.0429 Vs. USD/JPY at 132.38. USD/JPY is within 81 pips of its vital break and target at 129.00’s. DXY averages, EUR/USD seasonality, and lower USD overall will assist USD/JPY to break 132.
JPY Cross Pairs
EUR/JPY and CAD/JPY are only two currencies with fairly clear trade signals this week. AUD/JPY, NZD/JPY and GBP/JPY sit last to trade rankings. All JPY cross pairs site neutral to oversold against extremely wide ranges. Shorts are the best trades.
NZD Pairs
NZD/USD and NZD currencies overall are better trades than AUD as NZD sits in good positions and too long any drops. This means long NZD/CHF, NZD/USD and NZD/CAD. Caution to NZD/JPY.
GBP Pairs
GBP/USD is in decent shape to match NZD. Favored trades this week are GBP/USD, GBP/CAD, GBP/AUD, GBP/CHF. Dead last are GBP/NZD due to lack of range and GBP/JPY. Long drops are the preferred trade strategy.
GBP/CAD is a repeat from last week. Recall last week, oversold GBP/CAD recommended long, and GBP/CAD traded 200 pips higher.
Bulgarian Lev
USD/BGN's big break for lower remains 1.8777. Shorts from 1.9251 and 1.9284 target 1.9031 on a break of 1.9157.
Trade Rankings
EUR/USD, EUR/JPY, EUR/AUD, EUR/CAD, NZD/USD, USD/CAD, EUR/NZD, AUD/CHF, NZD/CHF, CAD/CHF, AUD/JPY, NZD/JPY, CAD/JPY, AUD/USD.
Overall best: EUR/USD, EUR/JPY, EUR/AUD, EUR/CAD, NZD/USD, USD/CAD, EUR/NZD.
AUD/CHF, NZD/CHF, and CAD/CHF are always good for quick and easy pips and guaranteed pips, but all remain last every week due to slim ranges.