The purpose to view long term is to determine if long term trades exist in the vicinity of 5 and 800 pips as was demonstrated before many times. Long term trades with 6 and 800 pip targets is defined as a guaranteed and easy trade and targets achieve perfectly.
Since at least last October, long term trades on the caliber of guaranteed and easy failed to exist as currency prices began to break 5, 10 and 15 year averages and sent currency pairs in horrendous positions both by themselves and in relation to cross pairs. The easy and guaranteed trades surrendered to longs and shorts in weekly trades per currency pair. More effort involved as work is required to achieve correct trades.
GBP/NZD as the king of wide rangers among the 28 currency pair line up, contains a trade range from 1.9067 to 1.9309 or a paltry 242 pips. Slightly improved from yesterday’s EUR/NZD from 1.6693 to 1.6786 or 93 pips. GBP/NZD due to wider ranges is the better pair to trade.
The common theme among the 21 cross pairs is current prices are surrounded by MA’s to severely contain movements. The compression of averages began in January, now exists in April and may exist long into the summer.
GBP/NZD to move higher must break 1.9309, 1.9385, 1.9424 and 1.9669. The only trade range exists is 245 pips from 1.9424 to 1.9669.
GBP/NZD below maintains a trade range from the 5 year average at 1,9067 to 1.9309. Only viable trades are range trades to short 1.9309 and long 1.9067. A break below 1.9067 would coincide with EUR/NZD break at its 5 year average at 1.6693.
GBP/NZD correlations to GBP/USD at +24 % and -0.06% to NZD/USD places GBP/NZD as a USD currency pair to move with DXY until correlations turn more positive to GBP/USD. This will happen eventually as GBP/NZD’s history to GBP/USD works on a positive to negative relationship.
Negative correlations always turn positive and positive correlations always turn negative. Imperative is to know correlations to determine if GBP/NZD trades with DXY or GBP/USD. The double trade always exist but trades are correlation dependent as GBP/NZD runs through its traditional transformations.
GBP/NZD Vs NZD/GBP
While GBP/NZD data with time and effort ran through the system to determine a 242 pip range, only requirement was to assess 2 minutes from NZD/GBP’s 27 pips to determine a trade range from 1.9334 to 1.9135. Below 1.9135 targets the 5 year average at 1.9067 or if 1.9135 holds then targets 1.9286.
NZD/GBP informs exactly how hard GBP/NZD was hit by surrounding averages as 242 pips should be 8 and 1000 pip ranges after running through the data. Instead, a day trade exists.
But in the words of Arthur Conan Doyle: “its a capital mistake to theorize before one has data.