The commonality in currency prices is found in the vast majority of currency pairs at crucial inflection points. EUR/USD for example at 1.1400’s approaches a multi year downtrend line and a break will see EUR/USD far higher over time to include the top channel at 1.2000’s. AUD/USD breaks 0.7803 would see AUD/USD far higher over time. NZD/USD 0.7438 faces the same scenario as well as USD/CHF in the 0.9300’s. USD/JPY at 100.38 and 99.86 is also at most vital points as well as EUR/JPY 116.62 and GBP/JPY at 140.61. GBP/USD at the 1.3456 break would see 1.3700’s in a short period of time. Major pairs are highlighted but the same scenario is seen across many many currency pairs.
What crucial inflection points mean is we either see the big breaks or massive dives. Current prices are located in danger/ neutral zones as prices approach respective averages and could easily fly either way.
Vital breaks if seen in risk pairs would signify the new period is upon us and the risk rally to last for years in the future. CAD/ZAR at current 10.52 reveals, short term, the risk rally remains as long as CAD/ZAR trades below 10.85 and 11.34. To ensure the risk rally remains years into the future then CAD/ZAR must break 9.49. Then EUR/USD, AUD/USD, NZD/USD and GBP/USD heads to upper decks, DXY would break lower, USD/JPY remains lower for longer as well as USD/CHF and USD/CAD. The inflection poins are here and breaks decides is it far lower for risk or enter the new trading period.
The big break for GBP/USD is found at 1.3456 and current price is built upon a base at current 1.2618. The base remains in the same position all week without significant movement. This says 1.3456 and all significant inflection points in highlighted currency pairs will not break easily.
Confidence in 1.3456 break must be seen in 1.3136, 1.3216 and 1.3290 then GBP has a shot. For today, GBP bottoms are found at 1.3076 and 1.3060. Must breaks to go higher are located at 1.3092 and 1.3108 then targets become 1.3158, 1.3153 and 1.3202 overall.
Brian Twomey, Inside the Currency Market, btwomey.com. Trade signals, FX Concerns email@example.com