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GBP/USD: Correlation Problem With Counterpart Cross Pairs

Published 03/28/2015, 05:22 PM
Updated 09/03/2023, 03:41 AM


GBP/USD not only has a Correlational problem with its counterpart pairs but GBP/USD is on its own without price assistance from companion pairs. Not even GBP/EUR shares a positive correlation. Only GBP/CHF is positive and and its not very solid. GBP/CHF is oversold and sitting at the bottom of its channel while remainder GBP cross pairs face stiff resistance from down sloping MA lines. GBP/CHF is the only pair with any possibility to take GBP/USD higher but the range is 129 pips total so GBP/CHF doesn't have ability to travel very far. GBP/USD by itself sits dead center of its channel. The pairs with any movement pontential vs GBP/USD are GBP/NZD, GBP/CAD and GBP/JPY due to wider ranges.

GBP/USD Vs GBP/JPY. To head higher, GBP/JPY must break 179.44 and 179.62 but those breaks leave GBP/JPY at its extreme top price at 179.65 and top of the channel at 181.01 and 181.07. Below extreme prices are found at 176.12, 175.66 and 174.03. The entire distribution is found between 176.29 - 182.57. Any prices found above or below are severely out of bounds. From 176.29, next points are found at 177.86, 179.44, 181.01 and 182.57. Sell rallies is the way forward.

GBP/USD Vs GBP/CAD. To head lower from current 1.8751, GBP/CAD must break 1.8632 and 1.8649. Current price is found at the lower end of its channel that begins from bottom to top between 1.8424 - 1.9216. Both are extreme points in the channel. From 1.8424, next points 1.8622, 1.8820, 1.9018 and 1.9216. Bottom side extreme prices are found at 1.8396 and 1.8350 while topside extremes are located at 1.8864 and 1.9100.

GBP/USD Vs GBP/NZD. GBP/NZD cleared every topside average from 2.0337, 2.0102, 1.9958. Now price sits, like all GBP cross pairs, at the lower end of the channel, a channel found between the bottom at 1.9397 - 2.0337. From the bottom at 1.9397, next points are found at 1.9632, 1.9867, 2.0102, 2.0337. Current price is 1.9660.

GBP/USD Vs GBP/AUD Current channel is found between 1.8781 - 1.9769. Price extremes within the channel are located above at 1.9370, 1.9717 and below at 1.8626 and 1.8565. Both bottom extremes are found outside the channel. Outside channel extremes represents a problem within the distribution of Moving averages at the 100, 200 and 253 Day points. For the most part, GBP/AUD has been a problem pair for quite some time and should remain a problem into the future. When a price distribution has problems then we find another pair because prices will be erratic.

GBP/USD Vs GBP/CHF. Current price at 1.4311, sits dead on the line at the lower end of the channel. Two price extremes, above at 1.4501 and 1.4117. The channel is found between 1.4182 - 1.4698. The next points are located at 1.4182, 1.4311, 1.4440, 1.4569 and 1.4698. Many lines at 1.4600's are descending and driving GBP/CHF lower.

GBP/USD Vs GBP/EUR. The entire channel is found between 1.3546 - 1.4110, that's EUR/GBP 0.7382 - 0.7087. The correlation shifted from GBP/USD to EUR/USD. EUR/GBP and GBP/EUR is driven by EUR/USD prices. EUR/GBP therefore has been contained within small ranges for quite some time. Its ready for a big breakout.

GBP/USD Extreme prices are found below at 1.4548, 1.4605, 1.4854 and above at 1.5238, 1.5091, 1.4944. The smaller channel is found between 1.4551 - 1.5152 while the larger channel is located betweern 1.4239 - 1.5342. The smaller channel is the focus as 1.4551 becomes oversold and overbought at 1.5152.

I would use any opportunities to sell rallies.

The story remains the same but the story is what central bankers wish for their currencies. My contention is non USD pairs will all head far lower over time. GBP/USD is the wildcard pair because Carney and the BOE wish to raise interest rates. But they need to see Yellen and the Fed raise first. That leaves GBP/USD in a good range bound place and not see their exchange rate on the bottom.

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