The battle lines are drawn between GBP/NZD Vs EUR/NZD and GBP/AUD Vs EUR/AUD as all pairs moved 500 pips in February to meet the criteria to re evaluate. A far different situation exists since December as GBP/NZD and GBP/AUD trade in a large and respected range while EUR/NZD and EUR/AUD trade at significant tops.
The significant rise in all 4 currencies since December is responsible for driving AUD/USD and NZD/USD to the ground at lowest oversold depths.
The driver currencies are EUR/NZD and EUR/AUD at representative tops and mathematical limits as prices can only travel so far until the maximum price is capped. The trade signal is derived from EUR/NZD and EUR/AUD as GBP/NZD and GBP/AUD follow. More importantly, significant tops to EUR/AUD and EUR/NZD informs AUD/USD and NZD/USD achieved bottoms.
The rise in all 4 currencies were derived from DXY’s upward moves in January and February as all 4 currencies are delineated as members of the 15 of 28 currencies driven by DXY and USD. The same top for EUR/NZD and EUR/AUD translates as DXY and USD tops for USD/CAD, USD/JPY and all associated currencies as USD/Other currency. Generally, tops and bottoms to EUR/NZD and EUR/AUD converts to tops and bottoms to DXY. The difference to substitute other currencies to analyze DXY is EUR/AUD and EUR/NZD provide early warnings as both trade wider ranges.
EUR/NZD top is located at 1.7243 and targets 1.6972, 1.6962, 1.6925. Significantly lower must break 1.6961 however EUR/NZD is up against massive supports from 1.6840 to 1.6700. EUR/NZD trades massive overbought.
GBP/NZD averages are located at 1.9382, 1.9415, 1.9512 and 1.9914. Below targets 1.9311, 1.9277, 1.9263 and bottom at 1.9133. Most vital are 1.9277 and 1.9275.
EUR/AUD lower targets are located at 1.5809, 1.5801, 1.5753 and 1.5690. EUR/AUD is held by lower averages at 1.5753, 1.5616, 1.5601 and 1.5562. EUR/AUD also trades severely overbought.
GBP/AUD must trade below 1.8121 or GBP/AUD targets 1.8175, 1.8204 and 1.8253. Below 1.8051 targets breaks at 1.7971 and 1.7957 to trade to 1.7849, 1.7738, 1.7694. GBP/AUD trades significantly overbought particularly from 1.7600’s.
Brian Twomey
BRIAN TWOMEY ON TRADING 