GBPAUD: Seeking confirmation for shorts.
Based on an idea from FullTimeTrader (www.tradingview.com/...tch-the-big-decline/) I am currently looking to short this pair (big decline sounds like music in my ears...).
On the monthly chart the recent spike was a perfect 50% retracement of the september 2001 to March 2013 down movement and as it turns out that also perfectly aligns with the 61.8% level mentioned in other members' idea!! A bearish AB=CD has also just concluded, suggesting down movement could be imminent.
I am still somewhat careful since momentum indicators are not yet fully conclusive except for the fact that we are very overbought. Some bearish divergence might be showing on the MACD histogram (not confirmed yet, wait some more bars!). Confirmation from that side would certainly win me over completely!
The 50 and 61.8 levels are really good levels to begin drawing all sorts of patterns starting with X @ either the sep. 2001 high or the oct. 2008 spike! I drew only one possibility on my chart in lightbrown (purely hypothetical, lots of others are possible). Based on that the next move down (if it comes) indeed could be massive!!
An alternative however could be a further rally up to the completion of the pink pattern (much more advanced and close to completion). This pattern could be drawn differently, based on where you would draw X, but the idea and direction stays the same.
Gameplan:
(1) Trying to get in at a good entry level for a long short down to C of the large pattern
(2) If stopped out and after confirmation of a prolonged upward trend I will try to get in on the possible move to completion of the pink pattern and ofcourse shorting after completion!
On the monthly chart the recent spike was a perfect 50% retracement of the september 2001 to March 2013 down movement and as it turns out that also perfectly aligns with the 61.8% level mentioned in other members' idea!! A bearish AB=CD has also just concluded, suggesting down movement could be imminent.
I am still somewhat careful since momentum indicators are not yet fully conclusive except for the fact that we are very overbought. Some bearish divergence might be showing on the MACD histogram (not confirmed yet, wait some more bars!). Confirmation from that side would certainly win me over completely!
The 50 and 61.8 levels are really good levels to begin drawing all sorts of patterns starting with X @ either the sep. 2001 high or the oct. 2008 spike! I drew only one possibility on my chart in lightbrown (purely hypothetical, lots of others are possible). Based on that the next move down (if it comes) indeed could be massive!!
An alternative however could be a further rally up to the completion of the pink pattern (much more advanced and close to completion). This pattern could be drawn differently, based on where you would draw X, but the idea and direction stays the same.
Gameplan:
(1) Trying to get in at a good entry level for a long short down to C of the large pattern
(2) If stopped out and after confirmation of a prolonged upward trend I will try to get in on the possible move to completion of the pink pattern and ofcourse shorting after completion!
