By Areena FxThe week’s DXY highs are projected to be 105.94 and 106.05. EUR/USD bottoms and longs at 1.0608, 1.0696, and 1.0585 to target 1.0730 at 46 pips from the close. This week, EUR/USD eliminates the query to DXY since EUR/USD is massively oversold versus little downside availability based on price transactions.
On a break of 148.10, overbought USD/JPY targets 147.17. The GBP/JPY large break for lower is at 180.43, which is 100 pips lower than the current price of 181.47. Lowering the USD/JPY for the week will help the GBP/JPY fall and trade closer to 180.43. All cross pairings will be able to aim for major breaks when the GBP/JPY breaks, such as the EUR/JPY at 155.73 and the CAD/JPY at 107.14.
USD/JPY is trading lower this week, as are JPY cross pairs. EUR/JPY is trading in the upper 156.00s, while CAD/JPY is trading in the 108.00s. GBP/JPY 180.43 will hold this week, but next week offers the biggest opportunity to cross lower.
DXY follows the same weekly pattern, with 100 pip bands above and below the current price. Following that are 106.01, 107.18, and 108.36, followed by 105.00, 104.00, and every 100 pips to 99.00.
The EUR/USD and DXY connection ensures that market ranges and movements moderate.
GBP/USD and AUD/USD are both heavily oversold, as is EUR/USD. GBP/USD must first trade to 1.2394 before moving on to 1.2400 and a long-term goal of 1.2736.
The best complementary trade to GBP/USD is AUD/USD, which tops NZD/USD. The AUD/USD and NZD/USD were higher during the week.
Economics
The next six-week cycle began with inflation releases while the central banks met. Inflation for all nations varied from 0.1 to 0.3 in the most recent 6-week period. The vast majority of nations traded at 0.1 to 0.2, but a 0.2 difference in inflation rates between GBP and the UK increased the range to 0.3.
The 6-week cycle consists of two weeks of economic data and four weeks of central bank meetings.
The first ten currencies in the weekly list are ranked from best and easiest transactions to least liked.
EUR/USD, USD/JPY, AUD/USD, NZD/USD, EUR/CAD, CAD/JPY, EUR/NZD, EUR/JPY, EUR/AUD, and USD/CAD are on the list.
The anchor currencies are used first and foremost to produce bigger trade ranges in response to larger changes. The anchor currencies are the same as the DXY V EUR/USD problem in terms of tight ranges, and it is the anchor currencies that must drag us out in order for us to trade correctly again.