Looking at the 10.4 four hour chart I have highlighted the last few times when we had sharp price increases. I do this to determine what currency out of the pair could move the market to determine where my TP's are place as well as S/L's if price moves in a different direction from what I set up for. The last move up was based on JPY weakness so let's hypothesize that if USDJPY was not to break 100 then for a large move up, say to 156.40 would have to see GBP be the driver of the move. As you can see on the GBPUSD chart below there is plenty of potential for a move upwards as price is slightly below WP. Today's price action shows also how quickly it can jump.
Now I am looking at the Daily CSS and I can see USD and JPY one on top of the other. This shows me they are ranging as a pair and unless something changes by tomorrow afternoon the main drive of price with GBPJPY will be GBP strength. Now we have an interesting scenario where if GBP news comes in positive price will go up quite a bit. After GBP news we will have USD news that will either bring down or range price action or if USD positive will send price really high... maybe a 300+ pip rally...
That is one scenario. Of course we could have negative news on GBP and/or USD to cause a different outcome which is why you look at different scenarios and calculate where price action could go and I set my strategies based on that.
