Forex Market Analysis

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Forex Market Analysis: GBPAUD 7 th JANUARY 2019

Transcript of Forex Market Analysis

Page 1: Forex Market Analysis

Forex Market Analysis: GBPAUD – 7th JANUARY 2019

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GBP/AUD

Current Price 52 Week Range YTD Return %

1.78619 1.7099 – 1.8740 -1.21%

Report Headlines

• Bulls established a solid uptrend from the October 2016 lows where the market

has been able to increase steadily to the upside.

• Bullish structure of the uptrend could be broken with a break below the key

support zone of 1.73023 – 1.70609

• Head and shoulders bearish pattern could signal a drop lower is imminent.

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OUR POSITIONS

Our position stop losses will be moved into a ‘break-even’ threshold to minimise downside risk, once the first target has been achieved.

Direction Entry Price Targets

SHORT 1.77069 1.76800, 1.76200, 1.75800, 1.75000, 1.74000, 1.73023

Support Zone Resistance Zone Pivot Point Zone

1.78606 – 1.77165

1.73023 – 1.70609

1.67779 – 1.66363

1.82680 – 1.90838

Direction Entry Price Targets

SHORT 1.70458 1.70000 1.69400, 1.69000, 1.68590, 1.67779, 1.66363

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Technical Perspective

Since the large sell off in the GBP/AUD currency pair which was triggered in August 2015, the market declined

almost 30% lower to the October 2016 lows. From these lows the bulls have been able to steadily climb higher

forming an uptrend within a rising channel. This is where the market is using both the trend line support and

resistance to consistently push higher producing higher highs and higher lows in the market which are the

makings of an uptrend.

Combined with the 61.8% fibonacci retracement level from August 2017 lows to the 2018 highs, a break below

the 1,73023 – 1.70609 support zone will be a very bearish signal for the market as we look to take advantage

and enter on short positions. Below here we expect the market to decline lower reaching the 1.67779 – 1.66363

support zone. That will be our final target for this current trade of short below 1,73023 – 1.70609 support zone.

Once the market breaks out of the current uptrend we are expecting the market to decline lower where a new

short trade position will be issued once the target of the current position has been reached.

Currently the market is being rejected by the 1.82680 – 1.90838 resistance zone. The market has failed to break

above this zone since the start of 2018 where all attempts have since failed. As a result, a continue failure to

break above this resistance zone will result in the market declining lower.

The set up that we are looking to occur is a break below the 1.73023 – 1.70609 support zone. A break below here

will mean a break below the trend line support of the rising channel that the market is within and also a break

below the neckline of the head and shoulders pattern that has formed.

So in brief, the bulls are failing to break above the 1.82680 – 1.90838 resistance zone resulting in the market

declining lower. Where a break below the 1.73023 – 1.70609 support zone will be a break of bullish structure in the

current uptrend as well as key support levels and trend line supports of the rising channel. As a result, turning the

market bearish and looking for a decline lower. As well as this, should the market break below the 1.78606 –

1.77165 support zone, we are expecting a decline to the key 1.73023 – 1.70609 support zone.

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