Most informed commentary to overall currency markets see cross pairs aligned to anchor pairs. , for example, is now aligned to by correlations at +99%, to +99%, to +99%, and to +99%.
is correct and a fairly permanent currency market condition vs at -98%. The rarely seen, yet great shift, to currency pairs is now complete by the CHF switch which means the 2nd side of the exchange rate no longer drives or controls, and correlates to opposite the 2nd sided currencies within an exchange rate.
no longer moves and correlates to JPY cross pairs, USD/CAD no longer moves and correlates to and 2nd sided CAD, no longer moves and correlates to AUD/CHF and 2nd sided CHF in the exchange rate.
EUR/USD, GBP/USD, NZD/USD, and AUD/USD now correctly correlate to their own cross pairs within the respective universe. A powerful development as the universe now trades together as one unit and it means ranges expand to create more profit potential.
USD/JPY, USD/CAD, and USD/CHF now trade on their own without cross pair assistance and are vulnerable to downside potential and diminished ranges. Besides the and trading above the vital 95.52, USD currency pairs within the 28 pair universe are now reduced to the following 3 currencies: , , and . CHF/JPY, by +90% correlations, belongs to USD/JPY, while GBP/NZD and GBP/AUD negatively correlate -22% to GBP/USD.
USD was once the driving force of currency markets as USD/JPY, USD/CAD, and USD/CHF correlated to 15 of 28 currency pairs. USD/JPY begins the week overbought and oversold to USD/CHF and USD/CAD
USD/JPY, USD/CHF, And USD/CAD
Last week’s long trade to target 114.25 and 114.32 traded to 114.50 highs and the short target at 113.41 traded to 114.29 lows. Wednesday’s highs at 114.37 traded to 114.05 lows.
USD/JPY weekly trade during the past 6 weeks achieved +900-ish pips for 6 trades.
Lesson for Traders
All 6 USD/JPY trades achieved upside and downside targets. No requirement existed to watch screens, charts, use stops or concentrate on the latest market news. The market price is matched to the mathematical strategy, but never a strategy matched to the price as this never works.
A trader’s final destination is to click on Sunday and exit by Friday without regards to price movements. This allows a trader to live life outside markets. Clearly a hard concept to grasp as most traders watch screens all day and don’t know or trust the price.
USD/JPY this week targets 114.64 and 114.71 then shorts target 113.59. USD/CHF driving price is located at 0.9337 and targets 0.9168, then 0.9253. Historically and from long term models, USD/CHF lives in a constant oversold position year after year.
USD/CAD trades the same weekly story as vital levels are located at 1.2250, 1.2697, and 1.3032. JPY cross pairs for the week are overbought to include Richter scale overbought CHF/JPY.
GBP
GBP/USD traded 1.3437 highs last week with…
Read More: FX Weekly: EUR/USD, GBP, CHF Correlations