First off, looking at the 20/50EMA sequences plus 50EMA slopes on the daily charts for major forex pairs. These are matching and bullish for all the major GBP charts and NZD charts, mostly bearish for AUD and CAD.
Taking the 50EMA slope directions separately, this is bullish for GBP in 7 out of 7 charts, bearish for CAD in 7 out of 7, so long GBP/CAD is of interest by this measure of strength/weakness.
Switching to weekly HL bars, only AUD/NZD has an impressive sequence of recent bars unbroken by the 50EMA (daily), with an 8-week run so far. 23 of the 28 major pairs saw their prices paddling back and forth across their respective 50EMA’s this week.
Weekly bar overlaps are also at an unusually high level. Looking back over the last 3 months, 18 of the 28 major charts show last week’s bar overlapping with consecutive preceding bars for at least half that period. 7 charts have 13-week overlaps.
Consecutive runs of weekly closes above/below the 50EMA shows a more mixed picture, but confirms the bullish performance of GBP and NZD, the bearish results for AUD.
Looking at the bullish or bearish “points” score for each pair from the above, there aren’t many high scorers. AUD/NZD gets full marks as a downtrender, GBP/CAD not far behind as a long. Just behind them are AUD/CHF, CAD/CHF, EUR/GBP and EUR/NZD shorts, and GBP/AUD and NZD/CAD as shorts. Excluding the minor currencies, the best trade indicated amongst the big 4 would be a EUR/GBP short.
But the lack of commitment across the board is a concern. Almost no sustained trends. Few sustained significant % moves. Large degree of ranging patterns. The Brexit deadlock effect might be responsible, as its hampering commitment to the 2nd and 4th most traded currencies globally, a combined total traded value at least twice that of the JPY, the 3rd most heavily traded currency. Brexit is not just a GBP issue.
The lack of commitment in the markets might be thought of as purely an issue for long-term traders. Not so. The impact of flat prices is being felt in short-term trades also like intra-day break-outs, ORBO’s etc… Thinking about it, why would the big players who move prices buy big when London opens? - prices aren’t going to rise far because big sellers will step in within about 5 minutes to hammer them down again, so why take the risk? If you normally trade intra-day with a very positive r:r, like 1:3 or more, maybe that won’t be attainable consistently for a little while.
Plus, political events between London and Brussels could (and will) change the picture within the next 5 minutes. At this stage, even the announcement of an unscheduled press conference at No.10 will bounce the GBP and EUR about like squash balls.
For both long- and short-term traders, this is a high risk period.