Along the way to EUR/USD shorts and DXY longs were 2 vital crossovers at 1.0800 and 1.0300. The EUR/USD break below the 5 year average at 1.0800's targeted 1.0300's. Since 1.0300's was the first EUR/USD V DXY crossover, EUR/USD traded to 0.9500's for an additional 1300 pips. When DXY crossed over EUR/USD at 108.00 allowed DXY to travel 700 pips to 114.00's.
Currency markets trade in a precarious yet rare situation by a EUR/USD and DXY crossover. From 1999 to January 2003, EUR/USD traded below DXY. The only crossover ocurred in 2003 when EUR/USD traded above DXY to become a 20 year permanent fixture to markets. This situation remained until DXY and EURUSD crossed at 1.0300's and 1.0800's.
The immediate efftects are to anchor currencies since DXY and EUR/USD are classic anchor currencies. Cross pairs are secondary as anchor currency movements are responsible for cross pairs moves.vs oversold GBP/JPY and EUR/JPY. JPY cross pairs lack a clue to direction as certain days JPY cross pairs exceed USD/JPY and other days, JPY cross pairs outperform. USD/JPY although overbought trades its correct ranges daily and weekly and is a well functioning currency.
EUR/USD Vs DXY separation is mandatory to create functioning markets again and this warrants concepts to a big move is upon us. USD/JPY targets 148.73 and 148.38. USD/JPY 147.00's are blocked for next week. Longs remain impossible as USD/JPY trades extreme overbought from 116.00's to 144.00's. AUD/USD and NZD/USD trade at Richter Scale oversold. Ranges severely compressed however longs provide pips and profits.