From FX weekly, EUR/USD 1.0665 traded to highs of 1.0639. Lows for the past 2 weeks achieved 1.0448 and 1.0528. Enter anywhere and all profited. GBP/USD 1.2351 achieved highs 1.2337. Lows for the past 2 weeks traded 1.2059 and 1.2162. Enter anywhere and all profited.
USD/BRL traded to target 5.0676 and USD/NOK target 10.8457 complete. Enter anywhere and all profited.
Further from FX weekly. GBP/JPY bottom and long at 181.00. Highs traded 183.80. Enter anywhere and all profited. USD/JPY bottoms at 148.00’s while highs traded at 149.32. Enter anywhere and all profited.
USD/JPY and Intervention
The words for BOJ intervention are false. The new intervention since 2008 particularly 2016 to relieve intervention costs is the manipulation of interest rates. This is exactly what the BOJ did and they informed of the drop in interest rates and USD/JPY miles in advance.
Previous to the drop, USD/JPY traded overbought from the range of 151.34 to 149.37. After the drop, the range became 149.37 to 147.40.
Shorts at 149.37 offered further downside as the drop derived from the London Fix at 149.03. How much profit was involved depends on the trader's time frame. From a day trade perspective, here are USD/JPY pip numbers: 150, 75, 37, 18, and 9 pips.
USD/JPY Imports and Exports
For the first time since October 2022 and on a monthly basis from the currency price, imports exceed exports. Yearly, Exports far exceed imports. The high Oil price from Qatar at $88 per barrel and Japan’s largest source of imported crude is contributed to Imports exceeding exports.
The Qatar Oil price contributed -30% to Producer Prices, 33% to Exports, and 74% to Imports. From the Commodity Contractual basis, Imports at 0.6 vs Exports at 0.5 reveals how crucial a role Oil contributes to positive and negative imports and exports.
The bottom line is the BOJ is subject to intervene anytime.
If the Fed raises then added pressure contributes to a higher USD/JPY to fuel greater problems to the BOJ’s Export and import lines. The BOJ desperately requires a lower USD/JPY under current circumstances.
Higher import lines translate to higher Inflation and lower GDP.
As stated all year, outside events are the catalyst to drop USD/JPY as the BOJ and the economic system continues to work perfectly. The Oil price is the stimulant from outside forces to add ammunition to a lower USD/JPY.
For the first time since October 2022, pay heed to BOJ speakers for the next month until November 12th. And guaranteed to be out in full force.
The Week Ahead
USD/JPY big break for lower continues to trade at 145.85. USD/JPY trades overbought above 149.57. Next week targets the vicinity of 147.71 and to continue the yearly long short strategy. Long term at 147.00’s, USD/JPY remains massive overbought from lower averages.
A
EUR/AUD break at 1.6529 targets 1.6419 and 1.6225. EUR/AUD is required to trade 1.6419 minimum. GBP/AUD targets 1.9022 and 1.8768. GBP/AUD break at 1.9119 assist to target 1.9022.
Deeply oversold EUR/USD targets 1.0660 and above 1.0701 becomes 1.0826 and 1.0906. Continue long strategies as EUR/USD literally trades at the bottoms.
GBP/USD same story as EUR/USD as GBP/USD trades at bottoms and targets 1.2341, 1.2496 and overall 1.2698.
EUR/NZD top range is located at 1.7719. The expected close Friday at 1.7647 means shorts for next week to target 1.7500’s. Overall shorts are located below 1.7779.
GBP/NZD shorts below 2.0566. Next lower target is found at 2.0224.
Oversold AUD/USD targets the break above 0.6475 and NZD/USD above 0.6019. GBP/CAD watch for longs an shorts at 1.6761 and EUR/CAD at 1.4490.
Overall the vast majority of currency pairs trade at or near crucial breaks to signify much higher or much lower. Next week is a crucial time for currency markets.
