Weekly recap – GBPAUD may break higher on a golden cross

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The GBPAUD breakout may gain some steam after the pair has held the triangle breakout at the sub 1.8200 level and surged higher to new 2021 highs today. A long term triangle breakout and a “golden cross” where the 50dma crossed the 200dma may allow for some upside momentum to build. May 17th this pair looked like it would breakout, now it is confirming the breakout.

USDJPY probing ascending trend line

The USDJPY is looking vulnerable to a move lower as the pair is back below the 50dma and also probing a long term (2021) ascending trend line. The reason why we are watching this closely develop is that bonds look like they are regaining their footing, which may send yields lower near term. The USDJPY and XXXJPY have been fairly well correlated to yields recently, so a move lower there could allow for the USDJPY to revisit the 107.44 support near term which were the April lows.

NZDUSD Triangle Ready to Break?

The NZDUSD is in a triangle consolidation and we can clearly see the pair pivot off the lower trend line overnight. Triangle resistance is at the .7275 level and that would be the upside breakout point with the lower breakdown level at the .7150 level with the 50dma slightly below that at .7135 offering further support. This week we have the RBNZ rate decision on Wednesday morning NZD time, and if the central bank talks about reducing future bond purchases (tapering) we could see the top of the triangle come into view for a breakout.

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