GBPAUD: time for a dive? 1.89 has the answer!
A narrowing price action is promising that the “cooling” phase is about to end, and that a new strong move will shortly follow.
Now triangles are tricky to trade, and I strongly believe that they are bilateral in nature, not continuation. So, the break could be up, or down, and in my opinion that is 50:50.
In case the price does break below the triangle bottom, it will be breaking below the MA band as well, and the reaction could be very strong to downside.
This bottom is almost exactly at 1.89 & it will be our main support for today. A break below this level could result in notable dive taking us back down to 1.8811 (the 50% for the rising move from 05.01.22 lo to 07.01.22 hi), or even 1.8737 (the 71.4% for the same calculation).
A break below the latter is needed in order to give the potential drop more meaning. If we do break below 1.8737, then a move towards at least one of the key retracement levels for the rising move from Dec 9th bottom, will become probable. My 2 favorite targets in this group are 1.8684 & 1.8557.
This negative outlook needs a downside penetration of our support 1.8900. Without this break there will be no technical reason to short this pair. On the other hand, a break above our resistance at 1.8960 will do the exact opposite, as it could push the price easily above 1.90.
Good Trading & Good Luck!
Munther T. Marji CMT
Now triangles are tricky to trade, and I strongly believe that they are bilateral in nature, not continuation. So, the break could be up, or down, and in my opinion that is 50:50.
In case the price does break below the triangle bottom, it will be breaking below the MA band as well, and the reaction could be very strong to downside.
This bottom is almost exactly at 1.89 & it will be our main support for today. A break below this level could result in notable dive taking us back down to 1.8811 (the 50% for the rising move from 05.01.22 lo to 07.01.22 hi), or even 1.8737 (the 71.4% for the same calculation).
A break below the latter is needed in order to give the potential drop more meaning. If we do break below 1.8737, then a move towards at least one of the key retracement levels for the rising move from Dec 9th bottom, will become probable. My 2 favorite targets in this group are 1.8684 & 1.8557.
This negative outlook needs a downside penetration of our support 1.8900. Without this break there will be no technical reason to short this pair. On the other hand, a break above our resistance at 1.8960 will do the exact opposite, as it could push the price easily above 1.90.
Good Trading & Good Luck!
Munther T. Marji CMT