Currency market: Next week's trade lineup

Brian Twomey Brian's Investment

Currency markets end the week at neutrality and next week begins the same old neutral story. EUR/USD upon the break at 1.1490 traded 200 pips to middle 1.1200's. EUR/USD target today is located at 1.1033 and 2 points higher than yesterday.

EUR/USD downtrend must break 1.1267 then 1.1220 in order for the target at 1.1033 to be considered. The banks target at 1.0800's is today a fantasy. Chances are good this target derived from a minor bank. Minor banks today are no different today than the currency analysts and trade services.

The target at 1.1033 normalizes EUR/USD price to the downside. EUR/USD at 1.0800's says EUR/USD will move to deep oversold.

The driver to EUR/USD is longer-term averages are rising and trade deep oversold. As long as averages rise then the target risees along with the averages.

EUR/USD price contains 2 positives to shorts. December and January are most important for traditional EUR seasonal down trends. Same principle held for USD/DEM as the German Deutsche Mark.

Next is severely overbought stock markets. Both EUR/USD and stock markets are risk assets and trade alongside each other. Stock market downside corrections would take EUR lower.

If EUR/USD breaks above current 1.1501 then forget downside targets and shorts as the new target becomes 1.1700's and higher. EUR/USD is currently trapped from 1.1267 to 1.1501 and trades dead center at 1.1300's.

Question to 100,000 troops at the Ukraine border and a shot fired. Russia by no other choice must take the Black Sea in the Crimea in order to obtain an export and import route otherwise Russia is landlocked. In day's of old, a shot or missle firing would send the EUR down 100's of pips quickly.

GBP/USD is trapped from 1.3108 at the 5 year average to 1.3373 and 1.3420's. Longer term averages are oversold and rising. Same story as the EUR which says GBP 1.3108 won't walk thrfough easily. GBP must break 1.3108 or 1.3400's to get moving again. At 1.3300's trades dead neutral.

USD/CAD big break for lower is located at 1.2613. Below then next is 1.2200's at the 10 year average. USD/CAD trades 400 pips from 1.2600's to 1.2200's. Above 1.2613 then next is the 5 year average at 1.3037. From 1.2600's to 1.3037 is 400 pips, USD/CAD trades dead neutral.

NZD/USD break at 0.6846 November 24th at the 5 year average traded 100 pips lower to 0.6743. NZD/USD to continue the downside targets 0.6674 then 0.6640. Avobe 0.6844 targets easily 0.7013. Above 0.6844 then forget about EUR and GBP downside as NZD represented as bottom side currency price will bring up the rear guard and force GBP and EUR higher.

AUD/USD as this week's winner traded almost 200 pips from deep oversold at week's beginning. AUD was the only currency to achieve near target from long term averages at 400 pips. At current 0.7170, AUD enters neutrality. The big line break for AUD/USD is located at 0.7306. Longer term averages are rising and oversold and the same situation as GBP and EUR.

EUR/AUD below 1.5811 and 1.5771 would ensure AUD continues its winning ways higher.

The currency pairs to trade in upcoming weeks are EUR, AUD and USD/JPY. USD/JPY ranges are opening to allow trade far and wide however USD/JPY is overbought from short and long term averages. AUD/JPY and EUR/JPY have preferred pairs to trade.

EUR/GBP sits massive overbought. EUR/GBP is the main pair to hold GBP/USD in tiny neutral ranges. Overall, EUR/GBP is a horrible currency pair and lacks range movements.

GBP/JPY sits in the exact same position at week;s beginning. Above 150.78 would move GBP/JPY back to 151.00's. GBP/JPY trades between 143.73 to 150.25 and stuck between longer term averages.

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.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.