GBP/AUD could see a bearish reversal as price seems to have rejected the daily resistance level of 1.8185 and as a result forming a dragonfly doji on the H4. Along with the early hours of today where price failed to break this key area of resistance yet again.
There is bearish RSI divergence occurring on the H4 which suggests the strong bullish momentum could be coming to an end as it may not be sustainable.
Even if you consider this bearish move as a retracement, looking at the previous correction that took place around the start of September, price went to the 50% fibonacci level and consisted of around 220 pips. Therefore in this situation aiming for the same fibonacci level would give us around 160 pips minimum to the downside.
160 pips target with 80 pips stop, 2:1 risk/reward.
There is bearish RSI divergence occurring on the H4 which suggests the strong bullish momentum could be coming to an end as it may not be sustainable.
Even if you consider this bearish move as a retracement, looking at the previous correction that took place around the start of September, price went to the 50% fibonacci level and consisted of around 220 pips. Therefore in this situation aiming for the same fibonacci level would give us around 160 pips minimum to the downside.
160 pips target with 80 pips stop, 2:1 risk/reward.
Trade closed: stop reached:
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