130+ Falling Wedge

After bottoming out on its 1995 low at 130.00 and showing quadruple divergence on the daily MACD, GBPJPY has started out the New Year w/ three up days in a row, and is in a position to post a 1-month high settlement. See chart below.

For trend traders however the show has been in short USDCAD & long AUDUSD where trend signals last Friday would have rewarded traders nicely.

I am not one to look for relationships between the various markets. I’ve been lucky enough to have two great mentors, both of whom stressed to not even look at possible intra-market correlations, and to just focus on what an individual market is telling me and on identifying signals. I do know that when the higher time frame charts line up with the lower time frame charts that good trading follows. I’ve also noticed that when this happens in multiple markets simultaneously, really good trade follows.

We have such favorable technicals as higher and lower time frames being coordinated in USDCAD and AUDUSD and it would only make sense to me that going forward these currencies would be leaders, given the advantage they have in natural resources.

Not that I would ever base a decision on an opinion but it would have been nice to have seen the Greenback join the other “resourse currencies” and let the Euro try to assume the mantle of reserve currency, but something — an opinion –tells me that is not going to happen, and EURUSD will swing around and join Canada and Australia in leading anti-dollar campaigns.

As for USDJPY — see chart below — I was hoping for the low 80′s and she only got into the high 80′s. As long as this pair stays below 97.00 or so — which is a long way from 87.00 — the intermediate-term trend on the daily remains lower.

Jay Norris

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About Jay Norris

Jay Norris is Director of Education at Trading University, has over 30 years of trading experience, and is the best selling author of "Mastering The Currency Market", McGraw-Hill, 2009, and "Mastering Trade Selection and Management", McGraw-Hill, 2011. He has also been published multiple times in Technical Analysis of Stocks & Commodities magazine.

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