📊 Market Insight: How Base Currencies Drive the Market
One key lesson I’ve learned from my mentor is this:
When a base currency is trending, it often pulls the entire forex market with it.
For example:
When the Dollar Index (DXY) is trending, the whole forex market tends to move with momentum.
When the DXY is ranging, the entire forex market often consolidates or lacks clear direction.
The same applies to EURUSD, another major pair. If EURUSD is trending, the whole market tends to trend. If it’s ranging, most of the market reflects that indecision.
This happens because the USD and EUR are two of the most influential currencies in global markets — they affect risk sentiment, liquidity, and overall volatility.
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🔍 GBP/AUD Analysis: The Power of Multi-Timeframe Perspective
This week, I was analyzing GBP/AUD. My initial bias was bearish — I saw what looked like a clear drop and assumed the pair was falling.
But I made a common mistake:
I was zoomed in too closely, focused only on the lower timeframe structure.
When I finally zoomed out to view the higher timeframes, I saw a different story:
The market was not actually falling.
What looked like a downtrend was just a retracement.
It was a liquidity grab, tapping into demand zones and trendline support before continuing upward.
This shift gave me clarity:
GBP/AUD is still in a bullish trend and what I was seeing was just a setup for the next move higher.
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🌍 Fundamental Bias: USD Weakness, GBP Strength
Looking across the market:
The Dollar Index is falling, signaling USD weakness.
As a result, pairs like EURUSD and GBP/USD are rising.
This tells me that GBP is currently strong, especially against weaker currencies like AUD.
So, with GBP/USD trending bullish, it supports the idea that GBP/AUD will also rise, given GBP strength and AUD relative weakness.
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✅ Trading Plan for the Week Ahead
I use the weekend to prepare for the upcoming trading week by aligning my technical setups with fundamental bias.
Current status:
✅ All technical confirmations are in place.
✅ My bias for GBP/AUD is bullish.
🕒 I’m waiting for the Monday open to see where price begins to trade from.
📉 Then I’ll drop to the lower timeframes (M15–H1) to find my entry.
My targets are:
🎯 Target 1: Marked by the blue line on my chart
🎯 Target 2: Marked by the red line
🎯 Target 3: Higher up, beyond visible chart range due to screen limitations
💡 Final Takeaway
This experience reinforces the importance of:
Multi-timeframe analysis
Zooming out to see the bigger picture
Aligning technical setups with fundamental trends
It’s not just about what the chart shows in the moment — it’s about the broader context driving the market.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.