Traders trading Gold should observe closely the US dollar index. Gold and the US dollar Index have had a moderate positive correlation for the past week, this correlation is expected to continue. Thus, before you buy Gold at above the Resistance trend line, see to it that, at the same time gold is giving a buy signal above this level, US dollar index is also giving a buy signal.
Traders trading this pair should also observe closely other pairs such as NZD/JPY, GBP/USD, GBP/JPY, EUR/JPY, CHF/JPY, CAD/JPY, AUD/USD, AUD/CHF, AUD/JPY and The US Dollar Index. The mentioned pairs and US dollar index, had a strong positive correlation of up to +0.96 with USD/JPY, but had a strong negative correlation with EUR/GBP, EUR/USD, EUR/AUD, EUR/CAD, GBP/AUD and USD/CAD. Thus, only buy USD/JPY if more than half of the positively correlated pairs are showing the same signals and half of the negatively correlated pairs are showing an opposite signal (sell).
Traders selling this pair should sell, but up to 116.19, any movements below this level will signal further movements upwards.
GBP/USD weekly Review:
Traders trading this pair should also observe closely other pairs such as AUD/CAD, AUD/CHF, AUD/JPY, AUD/NZD,EUR/JPY, USD/JPY and GBP/JPY for Positive correlation trading. The mentioned pairs have a very strong positive correlation of up to +1 with GBP/USD but are strongly negatively correlated with other pairs such EUR/AUD, GBP/AUD, USD/CAD and USD/CHF. Thus, before buying GBP at 1.5157, ensure that more than half of the above pairs are all giving a clear buy signals, on the other hand, EUR/AUD, GBP/AUD, USD/CAD and USD/CHF should be giving clear sell signals
Traders should look to buy this pair at 1.5086 and sell at 1.5249. Any movements above the 61.8% fib level will signal further movements below up to the 100.0% fib level. However, should price close above 1.5249, further long positions are recommended.
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