The GBP/AUD is building a consolidation pattern. The breakout direction will determine whether there will be a downtrend continuation OR a larger bullish retracement.
4 hour chart
The GBP/AUD is most likely in a wave 4 (purple) pattern. This remains true even if a bullish breakout occurs above the resistance (orange lines) and the 144 ema close (blue). In this case, price is probably expanding the wave 4 via a WXY correction. Another ABC zigzag could occur within wave Y with a main target at 1.8750.
However, the current chart pattern is probably a bear flag or triangle pattern. The bearish breakout could confirm the downtrend within wave 5 (purple). The main support to monitor is the previous support fractal (dark green lines). A break, pullback, and continuation pattern is desired. The main targets are located at 1.78, 1.75, and 1.73.
The analysis has been done with the indicators and template from the SWAT method (simple wave analysis and trading). For more daily technical and wave analysis and updates, sign-up to our newsletter
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