The GBPAUD has the buyers showing control today/this week. The sellers were in control last week. The pair is waging a brawl between the two combatants.
For today, the rally is strong as the GBPUSD portion of the pair is moving higher and the AUDUSD is moving lower – despite the much strong employment stats. The buyers are connecting and bloodying the sellers. It is not pretty.
Buyers are bloodying the sellers in the GBPAUD
Technically, I love the BOUNCE off the 200 hour MA both yesterday and again today (see green line in the hourly chart below). If you are are GBPAUD trading junkie, that was a nice one to be a buyer! Low risk, and the reward took care of you.
Now we have extended above the 50% of the move down from the July 2014 high to the low reached on Monday at 1.7787 but also have some resistance against the recent ceiling high at 1.7860-75 area. With the price at the 1.7830 area (this pair swings around), with no position, I am doing nothing. With a long from below, watch 1.7787 for support and 1.7860-75 above as a take profit area perhaps. Shorts, are hoping against the same levels.
Overall, I am not a fan of the “V” formation seen in the chart. Yes you can still trade it. The bounce off the 200 hour MA is proof positive. Risk was defined and limited (and the current levels are also “tradeable”). However, is it a pair you can really trust?
The fundamental stories are still quite risky too. That may be the attraction of the buy side today – squeezing those who did not expect higher GBP and lower AUD in the face of Scotland and the employment report.
Nevertheless, I am a pacifist. I try not to look for a bar fight and this has the making of brawl with buyers getting bloody last week and sellers getting bloody this week. Enter the fight at your own risk, but be sure to do it when you can define and limit your risk (use the 50% and that ceiling area for your clues). No use in getting too bloody.
GBPAUD rockets higher.
