By Areena Fx
EUR/AUD traded to the 1.6303 target, a target first reported in August and September when EUR/AUD traded 1.7000’s. EUR/NZD traded to 1.7508 lows from 1.8282. EUR/NZD achieved a 700 pip drop in 15 trade days, while EUR/AUD trade duration was 15 weeks.
Best trades for profit this week are long EUR/AUD, GBP/AUD, EUR/NZD, GBP/NZD and EUR/GBP.
Overnight interest rates
Overnight interest rates of the eight major nations.
NZD and RBNZ 5.50
DXY and Fed 5.33
GBP and BOE 5.18
CAD and BOC 5.02
EUR and ECB 3.89
AUD and RBA 4.35
CHF and SNB 1.70
JPY and BOJ 0.98
The Mid point of the range is located at 3.24 and a total range from 5.72 – 2.26. BOJ is subtracted as BOJ interest rates won’t move anytime soon then the range becomes 5.75 – 3.09.
RBNZ interest rates historically trade above the FED and the RBNZ is the central bank to watch for the first rate cut and signal among the G 8 nations. EUR and ECB rates traditioally trade below Fed rates. The question to successive interest cuts is not seen but rather a slow gradual process over a long period of time if and /or when a drop cycle begins.
The week
With the exception of USD/JPY and JPY cross pairs, currency prices will trade 200 pip ranges for the week and not break significant averages. EUR/USD for example will hold 1.0832, GBP/USD 1.2400’s, AUD/USD 0.6500’s and NZD/USD 0.6041.
USD/JPY twice last week broke vital levels at 147.50’s to trade 146.65 lows. The current levels at 147.37 is not only significant but historic as the break was anticipated all 2023.
USD/JPY 2022 – 2023 = 114.64 to 151.94. Then 2023 = 151.94 to 127.21. Current 127.21 to 151.90 is on a massive correction to target 144.00’s and 138.01 longer term. For the week, next targets are located at 146.22 and 145.07.
USD/JPY above 147.37 targets 147.95 and 148.23 however USD/JPY remains deeply overbought longer term and overbought from 5, 10 and 14 year averages.
The wild card to currency pairs this week is JPY cross pairs. AUD/JPY and NZD/JPY trade severely overbought while EUR/JPY begins the week at vital 159.62, CAD/JPY at 108.29 and GBP/JPY at 184.23.
The positive to USD/JPY and JPY cross pairs is the + 90% correlations as JPY cross pairs will trade lower along with USD/JPY.
EUR/JPY long term targets: 157.78, 150.05, 145.89 and 143.39. Count 1000 pips lower at JPY bare minimums and GBP/JPY targets 176.00’s, CAD/JPY 98.00’s, AUD/JPY 87.00’s, NZD/JPY 81.00’s and CHF/JPY 158.00’s.
USD/CAD and USD/CHF begin the week massive oversold while among CHF cross pairs, oversold is located with EUR/CHF and CAD/CHF.
Overbought remains to GBP/CAD, EUR/CAD, AUD/CAD and NZD/CAD.
WTI
As WTI dropped from 95.00’s, resistance points built into the price at every point up to 95.00’s. Higher for WTI must break 76.76, 77.88, 83.60, 84.48. Targets over next weeks are located at 70.45 and 68.74
SPX500
Overbought begins at high 4600’s to low 4700’s. Mucg lower must break a sold line at 4300’s.