Weekly Trades: GBP/USD and USD/CAD

As reported September 8 to Long term targets, GBP/USD contained a 2020 target at 1.3200’s yet traded to 1.3400’s. GBP/USD traded again to 1.3400’s and matched its 2019 target. GBP/USD long term targets dropped 200 pip per year and the exact same pip count as AUD/USD yearly targets.


To follow standard reversal formulas to normal price trading upon target completion, 300 and 600 pips becomes the bottom points. From 1.3400’s and counting 600 pips, GBP/USD 1.2800’s is current bottoms. Current GBP/USD 1.2800’s remains solid at 1.2892, 1.2868, 1.2860 and 1.2829.


From 1.3486 top to 1.2823 lows,, GBP/USD traded 663 pips and close to the 600 pip formula. GBP/USD then bounced to current 1.3000’s.


From GBP/USD 1.3486 top and the 300 pip count then becomes a danger zone as 300 pips at 1.3186 now bumps against the 5 year average at 1.3166.


GBP/USD is now caught between a 300 pip trading range from the 5 year average at 1.3166 and the vital break at 1.2860. Below 1.2860 then GBP/USD trades much lower. A 300 pip trading range is fairly standard in currency markets today over the past 3 and 4 years. And again matches the 300 and 600 pip formulas.


The overall driver to GBP/USD are many long term averages at 1.5000’s. Currently, averages at 1.5000’s are deeply oversold and any drops to GBP/USD then the averages achieves richter scale oversold. In the way of top averages at 1.5800’s is the 5 year average at 1.3166, 10 year average at 1.4526 and 14 year average at 1.5406.


GBP/USD from 1.4526 to 1.3166 equates to 1360 pips or a mid point at 680 pips. From 600 pips is then broken down to 300 pips to factor overall trading ranges.


USD/CAD 5 year average is located at 1.3190 and the 10 year at 1.1922. At 1268 pips, a mid point exists at 634 pips and again the 600 pip formula.


Longer term, USD/CAD is overbought and matches GBP/USD oversold.


Weekly Trades GBP/USD and USD/CAD.


GBP/USD and USD/CAD are the exact same pairs with matching exchange rates except both trade in opposite directions. Daytrades for GBP/USD and USD/CAD move by exact pips only in different directions. The daytrade count falls into the 300 and 600 pip formula.
GBPP/USD is deeply overbought while USD/CAD is deeply oversold.

GBP/USD

                        GBP/USD

Short Anywhere or 1.3049 and 1.3064 to target 1.2892.
Short below 1.2860 to target 1.2765.


Long 1.2765 to target 1.2829
long 1.2892 to target 1.2954

USD/CAD


Long Anywhere or 1.3104 and 1.3100 to target 1.3341
Long above 1.3359 to target 1.3470.


Short 1.3470 to target 1.3396.
short 1.3341 to target 1.3247.


Note to GBP/USD target at 1.2892 and USD/CAD at 1.3341.

GBP/USD current opening price at 1.3041 and USD/CAD 1.3115, a separation of 74 pips. The visual to the GBP short trade is GBP/USD trades below USD/CAD. For GBP/USD to trade higher, it must cross above USD/CAD. For USD/CAD to trade lower, it must cross below GBP/USD.


At 74 pips warns to a giant move ahead for both GBP/USD and USD/CAD as both will meet the 300 and 600 criteria.


All trades as usual are factored by pen, paper and calculator. No stops, charts, graphs nor screen watching.

Brian Twomey