Last week GBPAUD proved to us why it is one of the most volatile currency pairs with a 350 + pip surge past 1.770 only to take out all buyers with a 280 pip drop during the last 2 trading days of the week. This significant drop to end the week has brought us clarity as to where this pair is headed next. As we can see the pair was halted at the 61.8 fibonacci retracement level from the last leg down on the daily, which also happened to line up with a daily resistance zone that I have marked on the chart. This pair has now established a lower high in comparison to the highs at 1.7995 and we can now expect price to continue its bearish momentum down towards 1.695, breaking the lows of 1.710 and continuing the down trend we are currently in. Stops on this trade should go above the wick on the most recent daily candle as price is highly unlikely to reverse above those levels. A break and close below the ascending trend line will be further confirmation of the short down to 1.6950.
Trade active:
Markets have opened and this trade is now active.