FX weekly — USD/CLP vs Copper, interest rates, and 20 currency pair levels and targets

Australia's ASX 30 day Cash Rate Target Tracker informs a 37% chance for the RBA to raise to 4.10 as of last Friday and up from 22% on June 1 and May 31. Vital Bank Bill Swap rates dropped substantially since May 31 while OCR traded 3.85 to 3.82 since the last RBA raise to 3.85 on May 2. No indications exists for the RBA to raise. 

The 30 day Cash Rate tracker informs a raise to 4.16 best shot occurs from August to December 2023 then begins a long and slow slide lower to 3.52 by November 2024. 

Canada's 3 month CDOR rate and traded as BAX  informs a 28% chance for the BOC to raise by 25 points. Implied rates reveal  September at 88% and December at 84% as the best probability to a BOC raise by 25 points then begins lower rates until March 2026 however against low probabilities. December 2024 and March 2025 both offer a 64% probability of 100 and 125 basis point decrease and 96% probability September 2025 by a 175 basis point drop. 

Central banks align as either one last raise or in preparation to drift  lower and extraordinarily slow. In 2024 and 2025, writings will reveal the probabilities of  a possible 25 point drop. 

The key word is extraordinarily slow as central banks fully adopted phase 2 from the 2016 interest rate reshuffle by first eliminating interest rate maturities from 7 to 5 rates. The SOFR Vs Fed Funds rate serves as an example to all central bank's latest methodologies. 

Fed Funds ability to trade 25 and 30 points per day is matched by SOFR to trade 18 and 20 point days. SOFR ranges provides control to Fed Funds to ensure Fed Funds trades within its boundaries yet limits Fed Funds ability to trade full daily ranges.

 All central banks not only adopted a typical SOFR rate but also created compound indexes to trade alongside the newly produced SOFR rate. Fed Funds ability to trade full daily ranges became a rare day as central banks slashed interest rate ranges and all central banks followed. 

Central banks pre 2016 were distinguished by either an interest floor or ceilng system. All central banks today are now floor and ceiling systems. Note the similarities to raise probabilities as all central bank interest rates reveal the same probabilities. Interest rate numbers from central bank to central bank are different but all interest rates trade and perform the exact same operations. 

Seen in markets are rare days to trade 100+ pip days, 50 pips to interest rate changes and NFP surprises go unnoticed. EUR/USD for example traded 400 pip ranges in each of the past 7 months and broken down to 50 pip days. 

The Week

AUD/USD begins the week deeply oversold and targets the break at 0.6638 to trade the target at 0.6700's. EUR/AUD's target at 1.6083 traded to lows last week at 1.6187 from 1.6500's. New targets are located at 1.6119, 1.6004 and 1.5900's. EUR/AUD opens at 1.6201 and just above the big line break at 1.6198. Higer for EUR/AUD must break a vital line at every 100 pips to 1.6500's. EUR/AUD remains the preferred trade to GBP/AUD. 

GBP/AUD is held below by 2 lines at 1.8580 and 1.8581. While EUR/AUD vital breaks are located at evey 100 pips, GBP/AUD trades 200 pip ranges. The top lines for GBP/AUD are located at 1.9000's and 1.9100's. 

EUR/USD must break 1.0743 to trade higher then EUR/USD runs into trouble at 1.0779. 

GBP/JPY trades 170.37 to 172.24 – 174.83 at the 31, 32 and 33 year monthly averages. GBP/JPY traded 174.67 and dangerously cliose to 174.83. GBP/JPY big line for the week is found aright around 174.64 and a 172.00 target to start. GBP/JPY begins the week overbought. 

USD/JPY target at 138.16 traded to 138.45 lows from upper 140.00's. USD/JPY supports are located every 100 pips from 140.00's. We again target low 138.00's for the week. 

CAD/JPY achieved Richter Scale overbought status and targets 102.00's and 101.00's easily. USD/CAD trades deeply oversold and matches to overbought CAD/JPY. No hurry to trade USD/CAD as CAD/JPY is preferred. CAD/CHF trades fairly neutral and neutrality should allow USD/CAD to releive oversold while CAD/JPY trades lower. 

GBP/USD 1.2288, 1.2328, 1.2587. No changes to the same old GBP story. The target is the eventual break at 1.2687 then 1.2700's again. 

GBP/NZD overbought 2.0700's traded to 2.0500 lows and next comes 2.0300's, 2.0200 and 2.0100's. GBP/NZD begins the week overbought at 2.0500's. 

EUR/CAD and GBP/CAD both begin the week oversold.

USD/CLP Vs Copper 

USD/CLP 816.45 = Copper 3.6056
USD/CLP 817.40 = 3.5973
USD/CLP 819.31 = Copper 3.5806
USD/CLP 793.60 = Copper 3.8057
USD/CLP 792.65 = Copper 3.8140
USD/CLP 790.75 = Copper 3.8307