I’m in the middle of doing my pre-market open analysis, and thought I’d share my views on GBP/AUD with you all!
As I’ve mentioned in an earlier post – with Britain’s depart from EU still undergoing, it’s almost impossible to truly know what the fate of the GBP is. The following is a my analytical opinion from a purely technical perspective.
So here we have the a monthly chart, where we’ve seen price decline over 6500 pips over the past 2 years.
One thing that I’ve found that is very interesting is if we take use the Fibonacci tool to measure the latest retracement we can see that not only have we pinned and rejected the 38.2% level (1.7600), price has also tested my slower E.M.A – which commonly acts as a dynamic area of support and resistance.
Furthermore, the 127% Fib extension level lines up in perfect confluence with my monthly level of support at 1.4500. Historically, this level has stood strong as both support and resistance countless times. This area should act as a magnet-like level, pulling price lower.
With this said, price dropping to this level will potentially take years – we are currently sitting approximately 1900 pips away. This entire analysis is only used to aid me in forming a long-term directional bias.
Stepping down to the weekly chart, there isn’t too much to go into detail with here – other than the fact that our E.M.As have recently crossed to the downside.
One other thing to note here is the obvious rejection of my faster-moving E.M.A, resulting in a bearing shooting start candle close. Because of this, I expect further downside in the coming weeks.
Here we can see much more clearly price forming new lower lows and lower highs, with the most recent being a rejection from the support turned resistance level of 1.6620 + 0.5% Fib level.
The most recent lower high was confirmed on Friday with the bearish follow-through after a shooting shooting star formation breaking an intra-day C.T.L. Personally, with all the momentum found on the higher time-frames and using this in conjunction with Daily/H4 setups – I now see this pair continuing its fall down into the 1.6000 level ( a major psychological barrier).
Why? Not only is this the next monthly support level, the 127% extension level of the current daily Fibonacci formation falls into this region.
I apologise for being inactive last week, I have a lot of things happening behind the scenes. Nevertheless I appreciate the continued support through the messages and emails I’m receiving!
I hope you all have an amazing week in the markets!