To correct a misnomer published by an unknown person. Exchange rates are standard and always permanent at 6 decimal places not 4 as written. Platforms may show 4 decimal places but its actually 6. The difference today is slight yet it may be vital to a significant MA point or entry and target to factor 6 decimal places. Many central banks publish 6 decimal places and hold to tradition.
Remember this RBNZ yield curve. How ridiculous was this to even consider as the curve extends from 2021 to 2041.
Trader concern to factor exchange rates to the yield curve for today is seen by barely 1/8 of an inch for 2021 and this 1/8 of an inch rarely changes unless a headline interest rate is adjusted by central banks. Then must re factor te new yield curve but it won’t change by much.
Here’s NZD/USD factored to the yield curve.
Above
0.7174, 0.7176, 0.7204, 0.7260, 0.7440, 0.7686, 0.7981 and 0.8331.
Below: 0.7156, 0.7170, 0.7199, 0.7288.
Warning. A bottom exchange rate number factors different from an above exchange rate. The difference is 2 different worlds to 2 completely separate calculations. Don’t let me lose the crowd, its very simple.
2 year yield = 0.7174
5 year Yield = 0.7260
10 Year Yield = 0.8331.
2 Vs 10’s = 0.7686.
Not in the modern day of trading does an exchange rate trade nor factor to a 10 year yield and hardly to a 5 year yield. USD/JPY is the only currency that may or may not come close to a 5 year yield and because its USD in first position then USD factors to the USD yield curve.
The entire yield curve is in a positive upslope as is most yield curves otherwise we would have bottom exchange rate points to know and trade. A positive slope to go more technical means the slope factors to 0.0121.
NZD/USD 0.7174 today becomes most vital point
Most significant point for lower: 0.7039.
Above 0.7211 and 0.7196 vs Below 0.7155, 0.7153, 0.7146, 0.7141 and 0.7137.
Today
We’re approaching most vital points.
EUR/USD 1.2034. At 1.2119 broke and traded 1.2054 or 66 pips. Do or Die for EUR as 1.2034 breaks or significantly higher.
EUR/JPY however is not ready to follow at 125.51 and trades above.
EUR/CAD as written Sunday, 1.5503 broke lower to 1.5450 or 53 pips.
USD/JPY as written Sunday 104.92 vital above and USD/JPY traded to 105.02. Today 104.92 is actually 104.97 and the vital break below is located at 104.40 from 104.31.
Best USD/JPY shorts today at 105.52 and 105.56 to target break 104.97 then 104.81.
CHF/JPY or same pair as USD/JPY trades above at 116.47. Both pairs are now in sync. Have a double on shorts, USD/JPY and CHF/JPY short 117.53 and 117.44 to target 117.18 then 117.09 and 116.95.
AUD/USD is holding above 07533 and AUD/CAD above at 0.9706.
USD/CAD is close at 1.2894 to break higher or much lower.
EUR/AUD Long way to 1.5983. GBP/AUD higher this week from. 1.7852. Divergence still seen…
Read More: NZD yield curve and vital points