GBP/AUD stiff resistance not far away, bears form long leg doji

FX:GBPAUD   British Pound / Australian Dollar
135 0 7
Rejects near resistance at 1.9313 levels (i.e. 38.2% Fibos on monthly basis), previously upswings are certainly not a trend reversal.

As the pair drags upswings 1.9313, we see bears rejected at this level.

As a result, the formation of “Long Legged Doji” is seen at 1.9147.

By then, stochastic oscillator has reached overbought region and popping up with selling pressures as we see the attempts of %D crossover above 80s.

Although price bounces above, MACD has remained below zero levels which is a bearish trajectory.

Major downtrend seems still robust.

We had stated in our previous post that the breaches below crucial supports at 2.0054 and 1.9302 may expose towards 50% retracement .

Despite this month’s price bounces, the pair has now created a new bearish environment as it has consistently remained below 7DMA from last 6 months or so.

Bears can load weights in short as selling momentum is confirmed by leading oscillators.

On monthly plotting, the extensive evidences of bearish trend continuation after the evidence gravestone doji and hanging man patterns at around 2.1553 and 2.1607 levels on monthly charts that are highly bearish in nature as appeared at peaks of rallies.

RSI on both daily and monthly are in convergence to the robust price declines, while %D crossover on slow stochastic still maintains even oversold territory that is one more signal for bearish momentum to continue in long run.

While no deviation from monthly MACD , the lagging indicator also confirms the downtrend continuation.

Hence, we expect the retest of 1.8372 (which is 50% fibo) in the weeks to come. So it is advisable stay short in mid-month futures contracts for the 1st target of 1.8838 which is next strong support and upon breach of this level once can also look forward for 2nd target at 1.8372 by expiration but strict stop loss should be maintained at 1.9313 and 1.95 levels.
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