Strategy Video: Why the 1.7000 GBPUSD Break Hasn't Charged Bulls
• GBPUSD broke major resistance at 1.7000 last week with virtually no follow through
• Technical levels can be rendered impotent or amplify incredible moves depending on backdrop conditions
• Fundamentals and Market Conditions are critical factors in deciding the impact of Technical levels
Market conditions change, and our strategy should reflect those changes. We have coded the DailyFX-Plus strategies for Breakout, Range and Momentum to adapt to these market shifts.
Why do breakouts and reversals around 'major' technical levels sometimes fail to generate strong market moves? Just this past week, GBPUSD broke above a 1.7000-level that has acted as a major turning and break point for the pair over the past two decades. Yet, there was little fanfare as the market found little follow through on the important event. Fundamentals and Market Conditions can dull or amplify the impact that Technical developments have. In this instance, a strong build up in BoE rate forecasts and market that struggles to produce trends curbed the otherwise remarkable development. We look at how to read the other two types of analysis to assess the impact of technical events and apply it to GBPUSD, EURUSD, AUDUSD and USDJPY in today's Strategy Video.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.