Currency market: EUR/USD and USD/JPY day trades

Brian Twomey Brian's Investment

EUR/USD and USD/JPY ran Correlations yesterday at -93% and today runs the same -93%. Yet for the past 3 weeks or so both EUR/USD and USD/JPY traded perfectly in the same direction. Both USD/JPY and EUR/USD yesterday traded long for a good distance.

Yesterday's separation to EUR/USD and USD/JPY ran 84 pips and today both expanded the separation to about 89 to 92 pips. What's the problem with Correlations is at a certain point the Correlation is affected by distance as Correlations is a measure mathematically to range and distance by moving averages.

Yesterday's EUR/USD and USD/JPY at 1.1300's and USD/JPY 114.00's were both oversold and married at the hip by exchange rates. Both lacked enough degree of separation for the Correlation to become affected. This will change as USD/JPY and EUR/USD exchange rates grow distance between each other.

EUR/USD and GBP/USD contain tendencies to throw curve balls as Correlations may run +90% but each take separate turns to longs and shorts. EUR/USD traded higher yesterday while GBP/USD traveled short. Today we should see GBP/USD higher and EUR/USD short.

Today's USD/JPY's 20, 50 and 100 day averages are located at 115.20, 115.02 and 114.54. No change since yesterday. No change since yesterday to EUR/USD's 50 and 100 day averages at 1.1337 and 1.1321. The difference is today's EUR/USD price joined its proper place within the averages.

Day trades were never designed for easy trades and profits. Before 2014 and 2015 when the ECB ran the day trade program, traders had 1 shot and 1 trade to profit and this required speed and FX knowledge as well as an understanding to what the currency price was doing.

Since 2015 and 2016, day trades massively changed as the central banks slowed the price speed. Now we have multiple longs and shorts and an expanded time distance to complete multiple trades. Yet ask 5 traders where to go long or short and 10 different answers materialize.

The day trade, trading and currency price is an exact mathematical science rather than a crap shoot to a weird art form which means only 1 answer is correct. Yet the 1 answer doesn't come with mathematical certainty. Yesterday's day trades ran perfect but no guarantees to today price moves.

Day trades over may weeks trade from a neutral price then trade to target.

Yesterday EUR/USD traded long form 1.1289 but our exact mathematical point was 1.1277. The target was 1.1334 yet 1.1334 broke higher to offer extra pips to the maximum trade to 1.1366.

A break of 1.1334 was required to target higher at 1.1366. Yet EUR/USD had an equal chance to trade short from 1.1334. Rarely does a day trade travel to its maximum target level.

EUR/USD from 1.1366 traded to exactly 1.1334.

USD/JPY traded higher from 114.71 while we were looking for a bit lower at 114.54. Yesterday's target at 115.03 traded to 115.23 for an extra 20 pips. But 115.03 was well within the confines from 115.03 to 115.32. EUR/USD traded to its maximum while USD/USD failed at maximum.

As day trades are used for extra pips to accumulate while waiting for weekly trades, the best option is never marry day trades. Best strategy is profit and exit especially when 8 currency pairs are traded twice daily. Many, many opportunities are available throughout ther week for the easy money trades.

NZD/USD at last night's RBNZ is one example as NZD/USD lifted from 0.6736 and the last point available for day trades was 0.6726 and 0.6731. NZD/USD contained 1 trade and 1 direction, long.

USD/JPY 4 numbers for today's longs and short are located at 114.45, 114.74, 115.32, 115.61.

EUR/USD 4 numbers for today are located at 1.1275, 1.1304, 1.1362, 1.1391.

Long bottoms and short tops to target each of 4 levels.

Author

Brian Twomey

Brian's Investment

Brian Twomey is an independent trader and a prolific writer on trading, having authored over sixty articles in Technical Analysis of Stocks & Commodities and Investopedia.

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