From longer term perspectives, currency markets for the next months will be driven by EUR/USD, USD/JPY and EUR cross pairs. Deeply oversold EUR/USD achieved targets from 14, 10, and 5 year averages at 1.1174, 1.1111 and 1.0973. EUR/USD is now in the prep stages to achieve its target level at 1.1300’s. Longer term, EUR/USD targets 1.1478.
EUR/USD broke below its 5 year average at 1.1490 in November and achieved its target at 1.0973 in March for 4 months. EUR/USD traveled 129 pips per month in each of the 4 months. To achieve the same 129 pips per month status on the upside, EUR/USD targets 1.1478 in 4.3 months.
Seasonally, EUR/USD traded correctly to its seasonal patterns from down months in November/December and January, to last until May/June. Historically, EUR/USD has completed 15 down months in January since 1999; 8 months were up.
EUR/USD now begins its slow ascent particularly when USD/JPY for April experienced 14 down months vs 9 up months. April USD/JPY movements depend on budget passage in the Japanese Diet.
AUD/USD trades 200 pips in well defined ranges from 0.7100’s to 0.7300;s, 0.7300’s to 0.7500’s and 0.7500’s to 0.7600’s at the top. Overbought AUD/JPY trades 80.00 to 84.84 however 82.84 must break to target 80.00’s. Overall, AUD/JPY trades 200 pip ranges to match AUD/USD.
EUR/JPY trades 124.78 to tops at 129.00’s. EUR/JPY’s big break is located at 126.53 and averages at 127.00’s to target 129.00.
CHF/JPY is held by 124.33 and 124.28 to target 119.00’s then to target 117.97. USD/JPY as the exact same currency pair trades in a similar situation as 114.60 and 114.44 must break to target 113.51 and 112.43 then 111.98.
No changes to GBP/JPY as the leader of the JPY cross pairs is to trade 148.00’s to 157.00’s. For the week, GBP/JPY trades are oversold.
NZD/USD trades 0.6700’s to 0.7000;s against vital breaks at 0.6909 and 0.6878. Overbought NZD//JPY targets lower levels at 77.61. Overall, NZD/JPY is held solidly at 75.00’s. CAD/JPY also targets about 100 pips lower.
Wide range currencies: EUR/AUD, GBP/AUD, EUR/NZD, GBP/NZD, and EUR/CAD target 3 to 500 pips higher. Best trades are EUR cross pairs. Targets will take time as averages are located along the price path.
No changes to GBP/USD as breaks are found at 1.3186, 1.3227, 1.3375, 1.3438 and 1.3562.
USD/JPY Weekly Trade
Week 15 begins at total +1875 pips. The last trade from Wednesday completed from 115.80 to 114.98. Entry was 115.97; slight miss but target achieved.
Due to oversold EUR/USD as USD/JPY’s perfect opposite and USD/JPY’s position this week, multiple trades are offered.
Short 115.30 and 115.42 to target 114.59. Short below 114.44 to target 113.73. Long 113.73 to target 114.20. Or long 114.59 to target 114.93.