darcsherry

GBPAUD | Perspective for the new week

Short
FX:GBPAUD   British Pound / Australian Dollar
A Breakout of channel negated my speculation on this pair as price continued to find new highs (see link below for reference purposes) and the appearance of a Double Top structure at this juncture in the market insinuates a risk of further decline if price successful breakdown Neckline @ AU$1.87800. Positive development unfolding as the Reserve Bank of Australia (RBA) is expecting that once the covid restrictions end, the economy would stage a quick rebound as it revised down its 4Q GDP forecast by 0.75%.

Tendency: Downtrend ( Bearish )
Structure: Supply & Demand | Reversal pattern ( Double Top )
Observation: i. It is very glaring that the Pound has imposed a show of strength over the Aussie since the beginning of the year 2021 hereby registering an 8.7% gain to culminate at AU$1.89800 at the end of July 2021.
ii. The appearance of Double Top structure at the very peak of the Bullish run inspires an extremely bearish technical reversal pattern after the price touched a peak two consecutive times (AU$1.89800 & AU$1.89230 respectively) with a moderate decline between the two highs.
iii. Even as sellers continue to make attempts to close below Neckline @ AU$1.878000 in the last two weeks, positive developments from the RBA incites a possible strength for the Aussie at least for the meantime as we anticipate a Breakdown of AU$1.87800 in the coming week(s).
iv. In this regard, I have identified a supply niche around AU$1.88500/1.88740 - an area I suspect momentum for selling opportunity as below key level remains a comfortable zone to open a position.
v. A successful Breakdown/retest of Neckline shall be an opportunity to add a position to our existing position.
vi. For the meantime, I am assuming that the Bearish expectation might be a correction of the impulse leg (see weekly chart below) until proven otherwise...Trade consciously!😊
Trading plan: SELL confirmation with a minimum potential profit of 200 pips.
Risk/Reward: 1:4
Potential Duration: 3 to 10days

NB: This speculation might be considered to make individual decisions on the lower timeframe.

Watch this space for updates as price action is been monitored.


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Past performance is not necessarily indicative of future results.