Brian Twomey
Brian's Investment
As written last Sunday, EUR/USD from long term averages are massively oversold and targets 1.1391 and 1.1399 on a long only strategy. EUR/USD opened Sunday at 1.1147 and traded to 1.1470 or +252 pips to 1.1399.
Further to Sunday, EUR/USD this week traded 323 pips or 14 X 6 = 84 and 84 X 4 or 323 is just shy of 336 pips.
As mentioned and shown over many years to complete trade targets for weekly, daily and 24-hour trades are factored by simple math and using pen, paper and calculator as charts, indicators, and all popular trade vehicles were discarded 10+ years ago.
As written Sunday, the massive USD Vs Non-USD divide had to close and this is exactly what happened this week. Trade strategy offered was long non USD pairs such as EUR/USD, GBP/USD, AUD/USD and NZD/USD. Entry doesn't matter.
The consequence to long Non USD currencies was short USD such as USD/JPY, USD/CAD and USD/CHF. Entry doesn't matter. USD/CHF fails as an actively traded currency pair because its a horrible exchange rate however USD/CHF dropped 200 + pips this week and was the big winner to USD/JPY at 142 and 124 pips for USD/CAD .
Note current USD/CHF 0.9211 vs 95.34 or 0.9534 DXY. USD/CHF for the long term future will trade 300 pips to DXY and both exchange rates won't meet nor cross over. This is a bonus situation to trade USD/CHF however USD/CHF contains severe Noise, signal and range problems therefore it was eliminated until trade conditions improve.
The massive USD Vs Non USD divide not only closed this week but the opposite scenario holds for next week as short Non USD and long USD due to the further divide that favors oversold USD and overbought Non USD.
The USD Vs Non USD demarcation line is seen most specifically in EUR/USD's 5 year average at 1.1524 Vs DXY at 95.06. DXY currently trades 95.31 and 1.1459 for EUR/USD.
If EUR/USD breaks above 1.1524 and DXY 95.06 then next week's trade life becomes a continuation to long non USD and short USD. DXY traded many times to the brink over the past month at 95.06 and recovered to trade higher.
EUR/USD for today's NFP trades top targets at 1.1488 and 1.1509 and 1.1524 holds.
USD/JPY short entry this week was 115.52. For NFP, the same trade is in effect to short 115.38 and 115.45 to target 115.02 then 114.78.
Best trades next week are GBP/JPY, EUR/CAD, EUR/AUD, GBP/NZD, EUR/NZD, GBP/AUD, EUR/USD, AUD/USD and GBP/USD.
Trading currencies and other financial instruments carries a degree of loss and possible loss of entire investments. Please managed your own risks, stop loss, and margins requirements.
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EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
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