March 2022, Inflation at 8.5% was matched by GDP in the first quarter at – 2.0%. DXY traded 96.93 and the Fed embarked on the first of 10 interest rate raises. By March 2023 and 1 year later, Inflation traded 1/2 at 4.%. All central banks followed the interest rate path.
All central bank Import lines skyrocketed and Export lines severely dropped along with money supplies. While the BOJ failed to formally raise interest rates, BOJ rates traveled higher and traded fairly volatile to account for rising Import lines and higher USD/JPY.
The distance to highest Imports and lowest Export lines since 2022 began a compression throughout end 2022 and 2023 to travel and meet in the center. Import lines are dropping while Export lines are rising.
Provided the Fed fails to raise again, the Economic condition is headed for normalcy again as central banks eventually drop interest rates and money supplies travel higher as Import lines drop and exports rise. Its an extremely slow process as Imports and Exports are Indexed and released every 6 weeks. Index prices move extraordinarily slow.
The United States releases Imports and Exports Friday and November 16. By this announcement, a comprehensive and understandable determination to Economics as Inflation and GDP will be known for all central banks.
Week Ahead
EUR/USD must trade to 1.0665 then EUR must break 1.0709 to target 1.0831, 1.0909 and 1.1001.EUR/USD trades deeply oversold.
CHF/JPY is the 2nd highest traded currency after EUR/USD by volume on the Tokyo Financial Futures Exchange. CHF/JPY is the exact same currency as USD/JPY. The difference is USD was replaced by CHF as both CHF and USD are also the same currencies.
As CHF/JPY and USD/JPY are the same currencies, a double trade exists. CHF/JPY bottoms this week at low 163.00’s and matches USD/JPY bottoms at low 148.00’s.
CHFJPY contains a big break line at 161.39 then CHF/JPY targets easily 159.12 and 149.01. Both targets are just the beginning to much lower targets.
Deeply oversold AUD/USD must break above 0.6479 to target 0.6567, 0.6724 and 0.6786.
NZD/USD must break 0.6012 to target 0.6063, 0.6227 and 0.6262.
GBP/AUD and EUR/AUD do or die to longs and shorts at 1.9106 and 1.6523. The overall strategy remains short.
JPY Cross Pairs
GBP/JPY big break at 180.22 and GBP/JPY trades within 200 pips. GBP/JPY bottoms and long this week at middle 181.00’s. We remain short as an overall strategy.
EUR/JPY waits for 155.85 to break and travel lower. EUR/JPY lows this week and long at upper 158.00’s.
AUD/JPY targets the break at 94.31 while NZD/JPY begins the week massive overbought and targets easily 88.73 then 88.34.
USD/CAD at the 1.3655 close trades massive overbought.
