GBP/AUD looks good for a run down

View Comments

With the shorter term trend line broken and the longer one just below weekly support line 2, the GBP/AUD looks set for a run down to the 1.845-50 area.  Given recent AUD strength ( call it strength or recovery) and an over bid GBP under pressure, it seems like a good play. Although the H4 100 moving average will come into play, a brief dip below is not out of the question. Especially the way the market has tended to over exaggerate moves recently.

 

GBPAUD

2014-02-01T04:24:16+0000

All|Australian Dollar|British pound|Technical Analysis

GBP/AUD|technical analsis

John Legett

30 Comments

  1. That’s certainly a good trade idea.

  2. I am here to serve. :) Really it is a good set up. Hard to watch 26 or so pairs all at one time. That is why we rely on the great readership! The H4 100 moving average is the only thing that could hold it up, around support line 1 in the 1.863 area.

  3. Everyone keeps discussing the “eur” Look at eur/gbp?

  4. I was ” Junior Spalding” once upon – A – Time John.

  5. Slow ya roll TL, one chart at a time. I have a whole weekend to fill. The other thing I left out was that we have lower highs, and lower lows, which also lean in favor of this trade.

  6. If ya can’t play with the big dogs, stay under the porch John.

  7. I aLlways pick on Adam.” John” He’s my target. Adam has BALLS !

  8. That’s a rather short-term chart, John. You should really be looking at the daily chart – gbpaud is at the top of an ascending channel.

    That is, I agree with your bearish call, but for clearer lines/levels, you should really be looking at that channel, rather than a 4 hour one.

    Cheers.

  9. By the way, a word of warning

    Looking at the first wave higher on daily chart – it moved up in 3 waves (I don’t count retracements as waves, hence the odd count), and this second wave higher has completed only 2 waves, hence after a small move lower (to 1.87 or 1.85 – depending which MA line it will bounce off) there is a strong possibility of a move higher to 1.92 figure prior to the much larger reversal and more sustained reversal.

    Good luck.

  10. Trend/line limited* bottom picking AUD since May 2013

  11. I’ll carry on bring on the other side of that one. I tend to ignore short term moves so we may both be right, and richer. I’m not all gloom and doom about Oz, where I live now. But AUD has lost its status of safe haven that catapulted it to parity and beyond. Mining boom over and sluggish economy are themed that should continue, while UK and US are on a much more positive path. Call it normalisation. Carry is too little to justify the risk. So I will hold on for my GBP and USD probably for much of the year.

  12. Phil I think you and hello are making similar points. It depends on time frames which we all know are different for everyone. My H4 charts are totally meant for short term trades of one to three weeks or less. hello looks at daily charts which are probably more along the lines of monthly trades, and you are looking big picture at the end of the year. Every point can be valid in this. I know we have scalpers on here that wouldn’t look much past a H4 chart if that. Channels, S/R, pivots be they monthly ,weekly, or daily etc. I prefer H4, and keep my charts consistent in that. Since not every one has the years of experience trading, I feel consistency is most important. Sure I can be wrong, and have been from time to time on here. I’m not afraid to stick my neck on the line. This isn’t a signal service, and my charts are for reader information only. I stress money management above all else. One way my charts can help longer term traders is entry and exit points. While I use a H4 chart, often I drop to lower time frames to find the better entry and SL. If you are longer term trading against my position, perhaps my H4 chart will give you a good entry to add to your position. It is just how you choose to use the information. I hope we all make a fortune. Cheers.

  13. A bit winded, but I’m in agreement John. Perhaps the phantom (UV) has some conjecture?

  14. Yep, agreed, I just meant to share a different angle, which I think is the driver of some of the flows we see. I am no longer trading, too time consuming for me. But I have a fair bit of experience behind me… I did not have the opportunity to chose my entry point. I have been short AUD since I got married… And that’s back a while now…

  15. @ CreditPhil. Yeah Right. You’re running silent.

  16. Phil I agree. I’ve been lucky enough to be able to bottom draw shorts in aud against usd and gbp for the last six months. As I’ve said earlier I’m a commodities trader and my style of trading is very short term, so long term trades are normally hard for me to keep hold of.
    I’ll be looking to cover my shorts against usd in the 70’s. I think there’ll be a lot of people who will get caught long around the ’85’ level which will give the next push down. What was said about sooner have this pair trading at 85 instead on 95 was taken out of context a bit. I’m sure if at the time it was trading at 85 he would have said he’d sooner see it at 75 if you get my drift.
    Against the gbp I’ll be looking above 2.
    Between now and then I hope we’re all winners, cheers

  17. In anything other than intraday I would be going long the GBP against the AUD. I would be atonished if the AUD is back heading south before the week is out.

  18. 87000 level is KEY – fib level – whole number – and a fairly strong floor if you look back – however we all know the market does what ever it wants to do, so long or short at this level obviously based on what ever the price action shows us. 87000 is the turning point.

  19. I have said this before, and I will again. Rarely are whole numbers a stopping point. They are more a target. Stopping points in my experience tend to be at 75 and 25. So to follow up on waterskiguy’s assessment, 8675 or 8625 would be more likely. The latter would be below my .863 area as described above. And that doesn’t even take into account an over extension of the move.

  20. Not a bad call for now!

  21. Good call JL..short since yesterday. Close to 1.88

  22. I’ve shorted GBP/AUD, waiting to get slaughter

  23. which break point are we waiting for ,I expect GBP to further pull back this afternoon when the london folks are coming in .

  24. Trade has now broken the bottom trend line and weekly support 3 of the current weekly pivots. If the bottom of the trend line can hold as resistance it should take another leg down. A close back above the trend line would tell me to get out as a reversal would be likely. :)

  25. Nice call down John.

  26. Thanks Mike.

  27. If anyone is still in this, you can hold for the bottom of the Daily channel which would probably come in around 1.7850-1.79 or be a big ole chicken and bank the 500 pips like me. :)

  28. I booked JL. Did you hold a position in GBPNZD? I didn’t….hindsight eh?

  29. Nope Tom. I had as many open positions as I was comfortable with. Of course most of the others just sat there. meh.

Top

© Copyright 2014 ForexLive™  |  Advertise With Us  |  Login To Comment  |  Sitemap

HIGH RISK WARNING: Foreign exchange trading carries a high level of risk that may not be suitable for all investors. Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance. You could lose some or all of your initial investment; do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading, and seek advice from an independent financial or tax advisor if you have any questions.

ADVISORY WARNING: FOREXLIVE™ provides references and links to selected blogs and other sources of economic and market information as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the blogs or other sources of information. Clients and prospects are advised to carefully consider the opinions and analysis offered in the blogs or other information sources in the context of the client or prospect's individual analysis and decision making. None of the blogs or other sources of information is to be considered as constituting a track record. Past performance is no guarantee of future results and FOREXLIVE™ specifically advises clients and prospects to carefully review all claims and representations made by advisors, bloggers, money managers and system vendors before investing any funds or opening an account with any Forex dealer. Any news, opinions, research, data, or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. FOREXLIVE™ expressly disclaims any liability for any lost principal or profits without limitation which may arise directly or indirectly from the use of or reliance on such information. As with all such advisory services, past results are never a guarantee of future results.