EURAUD and GBPAUD hint at direction of global economy.

This post is essentially just an observation of reversal patterns in both GBPAUD and EURAUD which can be seen in the two charts above, together with targets. Click on charts for a larger image. Both have broken over necklines although GBPAUD has yet to close above it. My own bias is for a continuation of the recovery in both pairs and as per my earlier post the volatility breakout in GBPAUD may be taking place.

So assuming that there is some more upside say for the next few weeks at least, what does this tell us about the near term perception of the strength of the global recovery? If both GBPAUD and EURAUD are biased higher then we are arguing that EUR and GBP will outperform AUD. This is clearly not a play on global growth. Thus my observation is simply that certain markets are beginning to price in a hint of a reversal in optimism about global growth in the near-term.