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While USD/JPY achieved March lows at 114.00's, USD/CAD traded 1.2400's and 1000 pips higher. Add EUR/JPY March lows at 124.00's and viewed is USD/JPY's explanation on a rampage higher to match USD/CAD and EUR/JPY. Naturally, EUR/JPY followed USD/JPY higher.
EUR/JPY is a highly neutral currency pair trapped between EUR/USD and USD/JPY yet more neutral when viewed against USD/CAD in a highly close exchange rate relationship. Once EUR/JPY traded and crossed above USD/CAD around 128.00's, EUR/JPY was off the the races for 900 pips.
EUR/JPY's historic position since WW2 is to forever trade above USD/JPY and competitive to USD/CAD. USD/CAD serves as the signal pair to EUR/JPY as much as NZD/USD is positioned to inform in regards to EUR/USD and GBP/USD.
Exactly, 2 separate currency markets exist as EUR/USD and GBP/USD vs AUD/USD and NZD/USD. EUR/USD's 167 pips led the way yesterday as usual for EUR/USD while GBP/USD as the laggard currency to EUR/USD traded 113 pips. USD/CAD's 120 pips fairly matched EUR/JPY at 93 pips and GBP/USD in a currency market battle for superiority.
NZD/USD lagged EUR/USD by a 65 pip trade day yesterday while AUD/USD managed 71 pips.
USD/JPY today trades 126.47 and USD/CAD trades 1.2596 or 51 pips. The second trade signal occurred when USD/JPY traded above USD/CAD. This allowed a free long trade to EUR/JPY.
USD/JPY now trades competitive to USD/CAD which means USD/JPY's rampage is done and must now trade dead ranges alongside USD/CAD as easy profits are finished. Traders must earn today's pips rather than given freely by Mr. Market.
Focus now shifts to JPY cross pairs to lead the way forward for USD/JPY and USD/CAD as 137.00 EUR/JPY trades 1000 pips above USD/JPY, USD/CAD and 2800 pips above EUR/USD.
GBP/JPY as the preferred short, trades 3800 pips above USD/JPY, 3900 above USD/CAD and 3400 pips above GBP/USD.
To the second currency market, AUD/JPY trades 1900 pips above AUD/USD or 1/2 to GBP/JPY 3800 and NZD/JPY 1700 pips trades above NZD/USD.
Historic leadership since the 2008 crash imposed by correlations experienced the 2nd side of the currency pair as positive correlations which means USD/JPY will lead JPY cross pairs lower rather than USD/CAD.
While USD/CAD provides currency markets with a signal to its perfect opposite GBP/USD, USD/CAD historically lacks leadership abilities. In certain short periods when spreads between GBP/USD and USD/CAD are wide then both GBP/USD and USD/CAD share the ability to reduce spreads. But neither are leader currencies. Current spreads run 500 ish pips and fairly normal for the USD/CAD and GBP/USD relationship. Which means no big moves expected as both trade normal ranges.
Major change to the currency trade lineup is instituted the 24 hour trade and the past 2 weeks of trades are viewed and posted prior and seen at btwomey.com. Yesterday 8 currency pairs traded to profit 500 ish pips. Every EUR/USD pip traded yesterday was known, seen and traded for profit.
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