GBPAUD possible daily fake out in play
GBPAUD is indicating a shift in trend and market structure. We have had an extended downtrend with multiple lower highs and lower lows. As we all know price does not move up or down forever. Trends have cycles, and perhaps the trend here is exhausting.
This means we would be looking for a long trade and the beginning of an uptrend.
So first of all, we have hit a major support/flip zone which also was a DEMAND zone in the past.
Secondly, we are seeing large wicks and fake outs here indicating a trap forming. Fake outs here tell us the sellers are thinking this will break below this major support, but the buyers step in and force the candle close above the support. Really do like fake outs, but the important trigger signal is the actual subsequent candle.
We can still sell off here, but for a long entry, we would want to see a daily candle close above the wick, or even an engulfing candle. Something giving us signs of buyers taking control. We do not have that yet.
The second way of entry is to await a confirmed higher low. The lower high we are working with is at the 1.8450 zone. As long as price remains below, we are in a downtrend. I would like to see that zone break. Perhaps we form a bottoming pattern like a head and shoulders pattern, as you can argue we could have a left shoulder and the head here. Look for a move up to that zone, a pullback then the break giving us the higher low and the break out.
So once again, that is what I prefer, but we can have an early entry on the confirmation of this fake out.
This means we would be looking for a long trade and the beginning of an uptrend.
So first of all, we have hit a major support/flip zone which also was a DEMAND zone in the past.
Secondly, we are seeing large wicks and fake outs here indicating a trap forming. Fake outs here tell us the sellers are thinking this will break below this major support, but the buyers step in and force the candle close above the support. Really do like fake outs, but the important trigger signal is the actual subsequent candle.
We can still sell off here, but for a long entry, we would want to see a daily candle close above the wick, or even an engulfing candle. Something giving us signs of buyers taking control. We do not have that yet.
The second way of entry is to await a confirmed higher low. The lower high we are working with is at the 1.8450 zone. As long as price remains below, we are in a downtrend. I would like to see that zone break. Perhaps we form a bottoming pattern like a head and shoulders pattern, as you can argue we could have a left shoulder and the head here. Look for a move up to that zone, a pullback then the break giving us the higher low and the break out.
So once again, that is what I prefer, but we can have an early entry on the confirmation of this fake out.