GBP Pulls the Punch Bowl
Last Friday left EURUSD, AUDUSD & EURJPY poised to party on the upside, which they did today thru Tokyo until GBPUSD and GBPJPY spoiled the fun by selling off sharply ahead of the London open. Parallel analysis aka Dow Theory states that if one index makes a higher high it needs to be confirmed by a second index for the move to be classified as primary. The same logic seems to apply to major currenies such as EUR, AUD and GBP. Even as many of the markets settled higher on Friday GBP was lagging the pack, which was enough of a resaon to not be surprised with today’s pre-London turn’around.
The TrendMap summerizes it best. With divergence in the way of the trends for the Daily and Weekly GBPUSD & GBPJPY the whole complex was slowed from trending behavior, and the Greenback was spared what could have been a nasty sell-off.
Jay Norris
www.trading-u.com
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