Currency market: EUR/USD vs US Dollar Index, vs CAD/ZAR, USD/BRL

Brian Twomey Brian's Investment

DXY broke above Sunday's reported 107.03 and traded to 107.32. DXY traded 106 pips this week. EUR/USD traded 177 weekly pips. EUR/USD's weekly range began at 1.0303 to 1.0148. Today, the range becomes 1.0299 to 1.0151.

Break of 1.0151 targets today's lows at 1.0083 and 1.0070. Long and hurry for any price within the vicinity of 1.0083 and 1.0070. Topside EUR contains 2 big breaks at 1.0134 and 1.0178. Targets become 1.0185, 1.0235 and if EUR goes insane then targets 1.0285.

EUR/USD problem is DXY as DXY's 2 big break above are located at 106.74 and 106.97. Both levels are the driving forces to today's markets. Trade scenarios look like this. If DXY breaks above 106.74 and 106.97 then long USD/JPY, JPY cross pairs and short EUR/USD.

Topside DXY 106.74 and 106.97 Vs bottom at 105.55. Without significant breaks to DXY, EUR/USD and markets trade in 100 pip ranges. EUR/USD for the past 3 and 4 weeks has been trading 100 pip days almost everyday of the 3 weeks.

Don't expect different today as the same 50 pips trade as every central bank meeting.

Big daily trade winners over the past 3 and 4 weeks were GBP/JPY, EUR/JPY then wide range currencies EUR/NZD, EUR/AUD and GBP/AUD. The vast majority of currencies trade 100 ish pips days. Gold is lucky to trade 30 point days while WTI and Brent trade 2 to 9 point days. We maintain extensive records.

The EUR/USD and DXY relationship is matched only by CAD/ZAR as EUR/USD's perfect opposite. CAD/ZAR trades currently 13.01 and its big break for lower is located at 12.71. If CAD/ZAR breaks 12.71 then long EUR/USD and Hurry. CAD/ZAR above 12.71 then long EUR/USD at the lows.

CAD/ZAR is a better guide than DXY. CAD/ZAR as a commodity currency is also a Commodity Neutral Risk Indicator. CAD/ZAR's invention 1000 years ago was the pivot to determine overbought and oversold to food products in traded markets as organized in the 1920's.

CAD/ZAR as EUR/USD perfect opposite is the same principle as saying CAD/ZAR is a USD currency and the exact same currency as DXY. Follow CAD/ZAR on the other horrible site that begins with investing.

USD/BRL achieved 5.4117 target from 5.5052 and actually traded to 5.3383 lows. Not only is USD/BRL oversold but longs target easily 5.4171. The round trip trade targets overall about 2000 pips.

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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