EUR/GBP V GBP/USD V EUR/USD

What drives EUR/GBP is EUR/USD as Correlations factor to 91%. EUR/USD and EUR/GBP lack positive correlations to GBP/USD at minus 75% EUR/USD and negative 95% to EUR/GBP. Viewed as GBP/EUR then GBP/USD aligns as + 95% and is correct.

Not only is EUR/GBP approaching vital point breaks at 0.7784 and 0.7752 but EUR/NZD and EUR/CAD are also at important break points at EUR/CAD 1.4347 and 1.6226 EUR/NZD. EUR/GBP bottoms are located at 0.7831 and 0.7770 then next comes 0.7878, 0.7910, 0.7925 and 0.8019. Further, breaks at 0.7752 targets 0.7645. The big point breaks above are located at 0.7999 and 0.8069. The strategy is short to target 0.7645 on a break of 0.7752.

GBP/USD bottoms are found at 1.4081 and 1.4199. Then next comes 1.4265, 1.4283, 1.4367 and 1.4449. Most important break points are located at 1.4296 below and 1.4401 above. Current price is located at 1.4329 and trades in upper range. To offer context to current prices, GBP/USD trades below every yearly average since January 1999. GBP/USD trades below the 1500 day average, trades below the 16, 15, 10, 7 and 5 year averages. GBP/USD trades below the 1 year average. January 2009, GBP/USD traded 1.3499, lows not seen since 2001 and 1984 – 1986 during the Plaza Accords. Both periods 2001 and 1984 – 1986, GBP/USD experienced first ever 1.1000’s – 1.4000 lows historically dating to 1953. The strategy is GBP/USD lower, target the range lows first at 1.4199 – 1.4081.

EUR/USD. Bottoms are found at 1.1198 and 1.1138 and we begin to experience normalized prices and ranges. Next comes 1.1238, 1.1259 and range tops at 1.1320 and 1.1338. Most important long short break points are located at 1.1202 and 1.1080. Again the strategy and my own personal strategy is EUR/USD much lower over time.

Brian Twomey, Inside the Currency Market, btwomey.com

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