Inside the Currency Market: Historic EU Levels and Targets

I last reported an historic average Feb 22 at 1.21186. Today's average now sits at 1.21229, a difference of 43 pips.

Last reported target was 1.2830, now 1.2832, 2 pip difference and a level that must break in order to see lower prices. Last reported upper end price target was 1.4002, today's change is now targeted at 1.4001, a 1 pip difference.

Further upper end targets next season: 1.3542 and 1.4252. Last reported targets were 1.3542 and 1.4254, a 2 pip difference in the upper end. Why the focus on the upper bounds is corporates hedge mainly at the 16 week level, approximatey 100 day average so the curve must be viewed and traded in advance. Purpose for the 100 day is it falls in line with month end on the 20th every month as well it doesn't interfere with various nation's Fiscal years. Last week of the month is rebalancing to reposition for the next 16 weeks.

My rock solidly constructed Probability Bands at the 95 and 97 % confidence intervals: 1.3514 and 1.0731, and 1.3777 and 1.0468. Last reported Bands at 95 and 97% intervals were 1.3513 and 1.0723 and 1.3777 - 1.0460.

Near term Bands not fully updated yet from Friday at 95% = 1.3246 - 1.3047, 97%:= 1.3265 - 1.3028 and 99% = 1.3278 - 1.3015. Bands move generally for EU 20 pips daily so a guide. One can see how not only price closed Friday inside the 99% band at 1.3019 but the reason why price had to retrace from the lows to hit inside the bands. When prices fall at or outside the bands, the market offers a free trade as prices must trade back inside the bands. The fact that we're at 99% says EU is heading higher, my target Friday was 1.3096 but will change by a few pips once I refactor for market opening.

I'm Brian Twomey author of Wiley / Bloomberg Press Inside the Currency Market: Mechanics, Valuation and Strategies. Statistically inclined and only statistically inclined may also view "Using the Z Score to Trade Foreign Exchange and other Financial Instruments

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Comment by ceasar on March 3, 2013 at 10:41am: Hi Brian, Nzd/Usd is again moving in a tight range and is one of the best performing pair in the last quarter. Any inputs?

Comment by Brian Twomey on March 3, 2013 at 12:01pm: Hi Ceasar, NZD/USD always outperforms all other pairs year after year, quarter after quarter due to the perfect 253 day alignment with the US,and need to finance in US. You may find NZD/CAD a complementary pair due from the RBNZ's dependence for financing with Canada as well.. I'll look at Nu

Comment by Brian Twomey on March 3, 2013 at 12:29pm: Led Zeppelin Stairway to Heaven: And its whispered that soon, if we all call the tune then the piper will lead us to reason. Then a new day dawns for those who stand long and forests will echo with laughter

Comment by Peter jcp on March 3, 2013 at 12:44pm: Morning Brian - showing your age with Led Zeppelin - you will be saying Black Sabbath and the Rolling Stones next ;-)). With regards to your bands I am more interested with the 3096 and the possibility of 3246 and 78 maxs this week?

You are saying the price needs higher than lower atm and ideas of 3400 -3700 etc are out of next weeks scope - but up to 3278 would be nothing after a 700 pip Feb drop.

Have a great March Brian and look forward to your daily and weekly targets

Regards

Peter

Comment by Brian Twomey on March 3, 2013 at 1:17pm: Peter, I correctly forewarned of range breaks with my Noise Ratios, well they rose further so again something is up and we're gonna get hit again with range breaks. One of two events occur with this Stat, either small ranges or violent range breaks such has occured with my warning. Its a measure of frequencies, intensity and density of trends and breaks.

I hold no confidence for 3278 or 3265 presently, higher 3000 yes but I'm concerned with my Noise indicator so high. I say at minimum 47 easily and higher. Oh no Black Sabbath but Rolling Stones definately

Comment by G Singh on March 3, 2013 at 1:38pm: Hey Brian, can you share some new gold levels? the closing price was 50.66. thanks for your time sir!

Comment by Brian Twomey on March 3, 2013 at 4:10pm: Peter, Was in hurry to church and not fully answered. Respect 3015 (broke), 3028 and 3047, those are present levels and extremely close till next forecast as bands only move 20 pips every 24 hour cycle

Comment by Brian Twomey on March 3, 2013 at 4:17pm: Ceasar, NU targets, not exact but close:on Friday Data, 0.8236, 0.8267, 0.8291, 0.8323, 0.8218, 0.8129, 0.8360. Watch 100 and 200 day average, causing irregular price moves. Overall target: 0.8272. Inner Bands: 0.8351 - 0.8246, medium: 0.8361 -- 0.8236 and 0.8368 - 0.8229

Comment by Brian Twomey on March 3, 2013 at 4:17pm: Hi G Singh, Yes be back

Comment by Peter jcp on March 3, 2013 at 5:09pm: Hi Brian - just out of interest do you trade like Dr Sivaraman and not bother with charts? Why I ask is I like you have great respect to many of his skills and I was a follower going back a few years ago and understand that real price followers - don't need charts. I disagree because you cannot spot dynamic S & R - but would be interested in your view on this ?

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