Brian Twomey
Brian's Investment
GBP/USD''s main problem is found between the USD/CAD and USD/JPY relationship.
USD/JPY 1.2724.
GBP/USD 1.2629.
USD/CAD 1.2694.
The battle lines are drawn and its the fight in the center between middle currencies. Middle? Reverse exchange rates is best seen to the relationships.
EUR/USD 0.9302.
USD/JPY 0.7861.
USD/CAD 0.7878.
GBP/USD 0.7916.
NZD/USD 0.6540.
2 sets of exchange rates exist and 2 separate trades: middle currencies Vs top and bottom as EUR/USD vs NZD/USD. The current paralysis between GBP/USD, USD/CAD and USD/JPY is enough to stop dramatic movements to EUR/USD and NZD/USD. Most trades are found as middle currencies because of tendencies to create much distance from top and bottom counterparts.
See AUD/USD for example. AUD/USD traveled 100 pips higher from 0.7037 last Wednesday.
Last Wednesday's lineup:
GBP/USD 0.8012.
USD/CAD 0.7813.
USD/JPY 0.7894.
AUD/USD was massively oversold against all counterparts.
Middle currencies are followers. A big EUR/USD move is always followed by GBP/USD in a delayed reaction the next day. Overall we have response Vs reaction. A big GBP/USD move has 2 choices: either correct to meet its middle counterparts or EUR/USD and NZD/USD must respond. Overall normality or harmony must be found and settled between top and bottom Vs the middle.
Response Vs reaction is an interesting case as it relates to music as Call and response. High notes respond to low notes and low notes to high notes. Its the mode of travel to play a vast majority of songs in any genre. Musical notes meet in the middle after the call and response.
Ask the currency brokers why they set up exchange rates with vast distances. GBP/USD at 0.8012 = 1.2481, GBP/USD 0.8011 = 1.2482, GBP/USD 0./8013 = 1.2479. GBP/USD contains a built in differential of 2 pips. This 2 pips is low in relation to GBP/USD by 1 point exchange rates.
GBP/USD as 1 point exchange rates should be viewed as 4 pips to start vs an 8 pip maximum to satisfy day trades.
GBP/USD must first cross above USD/CAD then USD/JPY decides targets and /or where to take profits when satisfied. Ultimately, we want GBP/USD to cross above USD/JPY then GBP/USD is home free to travel massively higher. Or a higher USD/JPY makes GBP longs so much better. USD/JPY at 1.2800's allows GBP/USD more breathing room to bank many more pips.
Trading currencies and other financial instruments carries a degree of loss and possible loss of entire investments. Please managed your own risks, stop loss, and margins requirements.
Recommended Content
Editors’ Picks
EUR/USD clings to gains above 1.0400 after Eurozone inflation data
EUR/USD stays in positive territory above 1.0400 in the first half of the day on Tuesday. The data from the Euro area showed that the annual HICP inflation rose to 2.4% in December, as expected. Investors await ISM Services PMI and Job Openings data from the US.
GBP/USD rises further toward 1.2600 amid weaker US Dollar
GBP/USD strengthens its bid tone and eyes 1.2600 in Tuesday's European session. The pair's advance is driven by a broadly subdued US Dollar and a mildly positive market mood heading into the US economic data releases.
Gold price bulls seem non-committed amid Fed's hawkish signal
Gold price attracts haven flows amid worries about Trump’s tariff plans. The Fed’s hawkish stance and elevated US bond yields cap the XAU/USD. Traders keenly await FOMC minutes and US NFP releases later this week.
Injective Price Prediction: INJ 3.0 upgrade reduces the token supply
Injective price extends its gains for the seventh day in a row, trading above $26 on Tuesday after rallying more than 25% the previous week. The announcement of the INJ 3.0 upgrade on Sunday, which focuses on significantly decreasing the token supply, could further fuel the ongoing rally.
Five fundamentals for the week: Nonfarm Payrolls to keep traders on edge in first full week of 2025 Premium
Did the US economy enjoy a strong finish to 2024? That is the question in the first full week of trading in 2025. The all-important NFP stand out, but a look at the Federal Reserve and the Chinese economy is also of interest.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.