EUR/USD and USD/JPY traded fairly neutral the past 2 weeks as a result of DXY resting at the 5 year average at 95.06. DXY bolted higher to 97.22 to trade near 98.00 and 99.00 monthly average tops.
DXY highs forced non USD EUR/USD, GBP, AUD and NZD to trade to extreme lows. Non USD currencies now trade at extreme lows to DXY while USD/CAD and USD/CHF trade at extreme highs. The USD Vs Non USD divide is wide and the enormous gap will close this week.
Trade instruction this week for Non USD pairs is long anywhere as entry doesn’t matter, while USD/CHF and USD/CAD short anywhere as entry doesn’t matter either.
BOE And ECB Preview
EUR/USD and GBP/USD trade 50 pips, possibly in the same direction. If traders don’t hit the day trade perfectly, then nobody earns any money.
Day Trade Hourly Averages
GBP/USD and USD/CAD trade an hourly average of 16 pips. GBP/JPY trades 19 pips. AUD/USD 9 pips, NZD/USD 8 pips, EUR/JPY 16 pips. EUR/USD trades 14 pips. USD/JPY at 14 pips. DXY trades 12 pips.
Factor deviations and intervals to the averages then movements are much smaller than the averages. Factor Fibonacci to day trades then its time to hang your hat because profits are impossible as Fibonacci entries and targets won’t ever trade.
A day trade factors as full and 1/2 ranges. Currency prices are trading 1/4 of the 1/2 range. A 3/8 Fibonacci factors as EUR/USD 21 pips on a 14 pip average or 7/8 as 49 pips.
Fibonacci continues its journey as a losing indicator as it fails to comply with simple averages. Fibonacci is the calculation of square roots of 5. Square roots of 5 never aligns correctly to the true market price which trades by simple averages. Now more than ever is the time to exclude Fibonacci as an indicator.
News Trading
The 21 and 23 pips trades only on off kilter news announcements but only major announcements. Off kilter to minor economic releases then prices trade within the deviation of roughly 8 pips.
For the vast majority of 72 traded hours, a currency and market price is located in neutral territory and is not tradable, as neutral isn’t a traded condition. Neutral means an equal chance exists to go up or down, but its a speculative guess.
Interest Rates
Fed Funds from the 1st to 99th Percentile trades 0.06 to 0.20 or 14 points. Certain days, Fed Funds trade much less. From April 2020 to current day, Fed Funds closed from 0.07 to 0.10. From August 2021 to the present day, Fed Funds closed at 0.08. Fed Funds from 0.07 to 0.10 or 3 points barely moves a daily market price.
The ECB’s new STIR rate trades 4 daily points from -0.55 to -0.59, but inside an 11 point Euribor range. Japanese Call rates trades a total of 8 daily points.
Viewed from monthly averages and interest rate ranges, central banks for the first time in market history managed to hold overnight rate, maturities and interest rate ranges into the smallest ever channels. This killed off day trades.
I can take my points to a more deeply detailed depth as we’ve been trading by daily central bank interest rates for the past 7 years. The overall synopsis is the day trade has been killed off by central banks and never to return. The new standard has been in existence for better than 1 year.
Weekly Trade
The viable trade remains the weekly, however with low daily trade averages, the parameters to weekly trades naturally compressed. Take EUR/USD for example, at 14 pips per hourly average. 14 X 6 trade days equates to 84 pips as the new weekly standard. All market price weekly trade parameters compressed to nothing.
The day trade is not only dead, but competent traders left the arena long ago. Remaining is an astounding level of incompetence ever produced by markets.
GBP/USD
The 5 year average is located at 1.3139. Here are GBP/USD's vital points: 1.3139, 1.3180, 1.3279, 1.3289, 1.3375 and 1.3446. 1.3498 and 1.3519.
EUR/USD
The 5 year average at 1.1522 and rising targets 1.1081. EUR/USD from long term averages are massively oversold and targets 1.1391 and 1.1399 on a long only strategy.
USD/JPY Weekly Trade
Week 10 to weekly trades and a grand total of 1221 pips.
Short 115.39 and 115.52 to target 114.18. Long 114.18 to target 114.58. Or short 113.79 to target 113.38. Long 113.38 to target 113.52.
USD Trades
USD/TRY, USD/CNY, USD/DKK, USD/HUF, USD/PLN, USD/RON, USD/MYR
USD/TRY long and short trade parameters: 13.3868, 13.4589, 13.4952, 13.6425, 13.7174 and 13.7741.
USD/CNY 6.2695, 6.3011, 6.3251, 6.3979, 6.4267, 6.4557.
USD/DKK 6.5832, 6.6181,6.4445, 6.7159,6.7476, 6.7796.
USD/HUF 327.86, 326.79, 324.67, 322.58, 320.51, 317.46.
USD/PLN 4.1736, 4.1545, 4.1339, 4.0899, 4.0733, 4.0535.
USD/RON 4.5045, 4.4843, 4.4622, 4.4150, 4.3956, 4.3744.
USD/MYR 4.2535, 4.2337, 4.2140, 4.1684, 4.1511, 4.1305.
DXY and USD are overbought. EM trade strategy is short only.
