The 4 and 5 year averages for DXY are 99.28 and 99.00, respectively. DXY begins the week at 104.29, and the critical levels of 104.40, 104.60, 105.25, and 106.72 are located above that. The price of DXY has a ways to go before it corrects; it is overbought, too high.
The DXY averages at 103.66, 101.13, 99.28, and 99.00 are the following values below 104.60. The next target is located at 102.06, below 103.66.
However, DXY and the Fed have a lot of issues in common. The statistical correlations between DXY and Fed Funds are very low, averaging +41%, +13%, +56%, +64%, and +62% during 1 to 5 years. At +80 and +90%, correlations should trade with ease. In order to correctly establish better and normal correlations, DXY and Fed Funds need to go up from their current extremely low performance.
poor correlations to DXY and Fed Funds flow directly into poor correlations to Import and Export lines, despite the fact that Import and Export lines correlate flawlessly from +80% and 90%. Exports have correlations ranging from 15% to 68%, while DXY vs. Imports runs from 5% to 64%.
Three weeks ago, the Fed Funds vs Import and Export lines showed averages of +78% and +45% for Exports, however today’s numbers were -16% and -56% for Exports.
DXY has not moved in the last four weeks and has moved 246 pip from 102.00 to 105.00, thus its current levels and lack of movement are excessive.
Import lines at correlations from 1 to 5 year averages at -67%, -52%, 6%, 21%, and 47% clearly drive XAU/USD. -34%, -61%, -4%, +15%, +47% are the export figures.
The import line, also known as the commodity line, is the obvious force behind economics and market pricing worldwide, particularly for all commodities and currencies. Long-term trades, typically lasting several years, are available on import lines. Powell’s interest rate reduction in March 2020, for example, caused XAU/USD to trade in the 1200s.
From March 2020 at 118.0 to 140.00, import lines increased, carrying XAU/USD to the present 2290.0. Powell extended a four-year, 1000-point free trade offer to XAU/USD.
The International Price Program is the name given by the BLS to the import and export price indexes. Monthly data goes back to 1989, and quarterly releases go back to 1982. The BOJ’s next data is scheduled on April 10 and April 12.
139.77, 142.11, 139.93, 135.64, 133.60 are the import averages. Exports: 153.12, 149.70, 143.07, 139.60, 148.59. As of right now, imports trade at 139.9 and exports at 149.0.
In general, the five-year average of XAU/USD shows positive trades with Fed Funds at +29%, +63%, +65%, +58%, and +27%. At the five-year average, XAU/USD trades negatively correlated with inflation at -24%, -77%, -64%, -22%, and +22%.
When looking at XAU/USD from a market standpoint, EUR/USD is by far the main driver at correlations of +23%, +81%, +8%, +2^, and +2%.
Average time intervals for XAU/USD are 1 to 5 years: 1901.79, 1874.94, 1861.52, 1783.26.
XAU/USD is aiming for 1998.05., 2038.94, and 2092.13.
ImporAt the moment, the two- and three-year monthly averages dominate the markets since they cover imports, exports, EUR/USD, XAU/USD, DXY, inflation, and Fed Funds.
Weekly
The monthly averages of EUR/USD establish a bottom at 1.0626. The weekly large line for the EUR/USD pair is at 1.0875, and we are short around that price.
The EUR/USD universe is trading pretty neutrally vs EUR/GBP and EUR/CHF, and overbought against EUR/JPY, EUR/CAD, EUR/AUD, and EUR/NZD.
USD/JPY and JPY cross pairs
Since the interest rate change, the balances in the BOJ current accounts have fallen like a rock. In reality, bondholders are switching to short-term T Bills and selling their bonds in tiny amounts. The 180-day average, which is currently trading at -0.05, is the final barrier preventing all-around positive interest rates.
The BOJ’s involvement following the rate shift is almost over, and the USD/JPY will resume its typical movement.
Targets are as follows: GBP/JPY 190.50, EUR/JPY 163.37, and USD/JPY 150.55.
CAD/JPY trades in a pretty neutral range, with a significant downward break at 110.62. CAD/CHF moves neutrally with CAD/JPY and needs a break at 0.6583. The currencies CAD/CHF and CAD/JPY are the same.
Since NZD has a larger trading band than AUD, NZD/USD is the recommended trade over AUD/USD. At 0.5981, the NZD/USD pair bottoms and moves into a big overbought position.
DXY is the reason why currency markets are still stuck in dead and narrow bands overall. For markets to trade normally once more, DXY needs to start moving.
The major GBP/USD line is around 1.2705. Short positions are welcome at any price above 1.2676. With the exception of the sharply oversold GBP/AUD pair, the GBP universe trades neutrally. The next GBP/AUD levels are 1.9246, 1.9261, and 1.9275.
At 0.9030, USD/CHF was overbought. USD/CHF is back to dead at 200 pip a month. Overbought USD/CAD looks to trade at 1.3512 after breaking out at 1.3539. Trade ranges are absent in CAD.
The next targets for EUR/NZD are 1.7949 and GBP/NZD, 2.0933 and 2.0893.