GBP/AUD Develops Strong Bearish Wave 3 Momentum

The GBP/AUD is showing a strong and impressive bearish momentum during the breakout. The downtrend is in full speed and expected to continue lower. Read this article for the main target.

1 hour chart

GBP/AUD 1 hour chart

The GBP/AUD bears remain in control as long as price stays below the resistance zones (orange boxes). A break above the wizz 4 level would invalidate (red x) the bearish outlook. But a bounce and breakout (green check marks) could confirm it. The current momentum, however, would first require a pullback like a bear flag (green arrows).

The GBP/AUD is expected to respect the 21 ema resistance zone too, if there is a pullback. The main target for the moment is aiming at 1.7750. The current push down could be part of a wave 3 (pink) of a larger wave 5 (purple). Recently price action seems to have completed an ABC (pink) within wave 4 (purple).

GBP/AUD 1 hour chart

Good trading,
Chris Svorcik

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

For a look at all of today’s economic events, check out our economic calendar.

 

GBP/AUD Might Start Dropping Soon

The GBP/AUD is not strong as the GBP/USD due to AUD strength and we might see the pair start dropping soon.

1.8030-50 is the POC zone. No close above the trendline should mark the start of the down-move in the GBP/AUD. The GBP is strong, but the AUD being a commodity currency is also strong so we might see a move down as the price is at the confluence and overall bearish. Targets are 1.8002, followed by 1.7965 and 1.7900. The move down in the GBP/USD will also reflect on the GBP/AUD but in a stronger way.

The Analysis has been done with the CAMMACD.Core and Sit Systems

For a look at all of today’s economic events, check out our economic calendar.

GBP/AUD Bear Flag Pattern Offers Breakout Trades

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

GBP/AUD 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.

GBP/AUD 4 hour chart

Good trading,

Chris Svorcik

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

For a look at all of today’s economic events, check out our economic calendar.

GBP/AUD Retracement is Coming

The GBP/AUD has formed a retracement pattern and if the bullish momentum persists we should see higher levels hit.

The pair has been supported above 1.8225 zone. However, we couldn’t see a clear bullish momentum above W L3 level. In that case a new bullish momentum might spark further upside above 1.8320. If 1.8220 zone fails, the pair might drop to 1.8165 and that will end the retracement higher and might put the pair in another downside extensional move.

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The Analysis has been done with the CAMMACD.Core and Sit Systems

For a look at all of today’s economic events, check out our economic calendar.

 

GBP/AUD Retracement to the Upside Above M H3 Pivot

Dear Traders,

The GBP/USD could make a potential retracement if the price holds above 1.8888. We can spot a consolidation at the POC zone.

The GBP/AUD has been consolidating near the bottom and we might see a push to the upside. Rejections off the zone should target 1.9059 and 1.9154. Only the loss of M H3 camarilla pivot could make the price go deeper down, continuing the downtrend. Pay close attention to candlesticks as the price on the GBP/AUD is volatile, making 147 pips on the average of 5 days.

The Analysis has been done with the CAMMACD.Core and Sit Systems

 

GBP/AUD The Trend Has Changed Watch For Selling On Rallies

Dear Traders,

The GBP/AUD bulls are currently defeated as the price moves heavily below all supports. Brexit caused an interim weakness in the pair.

If we see a retracement towards 1.9306 we could see the next drop towards 1.9250 and below. The 1-2-3 pattern is in play as the trend has changed to the downside and the entry has been activated. The entry is at the POINT 2 break. Targets are 1.9250, 1.9230 and 1.9197. Watch for 4h resistance around 1.9200.

The Analysis has been done with the CAMMACD.Core and Sit Systems

GBP/AUD Ascending Scallop Hints For Uptrend Continuation

Dear Traders,

The GBP/AUD bulls continue with domination. I will be looking to buy the dips once the price makes a retracement to the POC zone.

If we see a retracement to the POC 1.9505-85, I will be looking to buy the dips. We should see an upside continuation towards the ATR high – 1.9861 as the first target. The next target is W H3 camarilla pivot – 1.9881. There is no interim monthly level to stop the price as monthly pivots have been re calculated. The Ascending scallop pattern is strongly progressing.

The Analysis has been done with the CAMMACD.Core and Sit Systems

GBP/AUD Rallies to Multi-Year Highs on BoE Boost, Coronavirus Fears

Sterling was lifted on Thursday, after the Bank of England (BoE) announced its decision to keep the official bank rate on hold at 0.75%. Meanwhile, the risk-sensitive Aussie has been under pressure amid rising fears over the Wuhan coronavirus.

At Mark Carney’s final meeting, the Monetary Policy Committee (MPC) were more hawkish than expected, voting 7-2 in favor of keeping interest rates steady. The UK central bank justified its decision citing a recent uptick in business activity, a reduction in Brexit uncertainties and indicators that global growth has stabilised.

However, the BoE also cut its U.K. economic growth forecasts through 2022 and made it clear that a rate cut is possible in 2020. The CME BoEWatch tool currently shows a 22% chance for a quarter point rate cut at the March meeting.

Sterling extended its gains on Friday, moving towards a positive end to the week. The United Kingdom now turns it’s attention to its official departure from the European Union, scheduled to take place at at 11PM London time, midnight in Brussels.

The China-linked Australian dollar fell to fresh lows as alarming news relating to the coronavirus dominated headlines. On Thursday, the World Health Organization (WHO) declared the virus a global health emergency and Chinese authorities reported over 40 deaths in Hubei province. On Friday, authorities confirmed over 9,700 coronavirus cases in China. The figure exceeds that of those infected globally by the 2003 severe acute respiratory syndrome (SARS) virus. On Thursday, Israel banned the entry of all flights from China and the United States warned Americans not to travel to China.

Looking at the GBP/AUD daily chart we can see a well defined trendline representing potential support to the downside. The 61.8% Fibonacci retracement level at 1.9845 stands out as potential resistance above.

By Dan Blystone, Chief Market Strategist at Scandinavian Capital Markets

GBP/AUD Might Bounce From W L3 Camarilla

GBP/AUD is stronger then GBP/USD for the last few weeks. It is mainly due to AUD weakness. If the price drops to 1.9050-80 zone look for bullish patterns as the price might reject from the zone. Targets are 1.9250 and 1.9350. Have in mind that the GBP/AUD is a volatile pair as the ATR(5) is 131 pips. We might see big intraday swings so be ready.

GBP/AUD Might Bounce From W L3 Camarilla

The Analysis has been done with the CAMMACD.Core and Sit Systems

GBP/AUD is Still Bullish But it Needs to Break an Important Resistance

Dear Traders,

The GBP/AUD has formed 2 POC zones. At this point we see a continuation to the upside from the POC zone 1.8065-90.

A drop below the POC zone should target the POC2 zone 1.7950-80. If the price bounces from any of the zones, the target should be 1.8204. This is a very important resistance as it effectively is a bullish order block. Close above 1.8205 is needed for a continuation towards 1.8245 and 1.8311. Only a drop below 1.7868 will make the pair bearish.

The analysis has been done with the CAMMACD.MTF template.

For more daily technical and wave analysis and updates, sign-up up to our ecs.LIVE channel.

Many green pips,
Nenad Kerkez aka Tarantula FX
Elite CurrenSea

Surprise from the RBNZ drags NZD and AUD to new lows

First instrument in this analysis will be the USDJPY, which at the beginning of August broke the long-term up trendline and the horizontal support on the 107. We are writing about this just now, because yesterday, price tested that area as a closest resistance. Test was positive for the sellers as the USDJPY bounced from that level and went lower. The sell signal is ON.

Next instrument is the GBPAUD, which started Wednesday with an impressive upswing. The reason for this comes from the New Zealand but we will explain that in the last paragraph. Rise on the GBPAUD was supported from the technical point of view as well. The price made a triple bottom formation on a long-term up trendline and then broke the neckline (red) and the mid-term down trendline (black). Currently, we do have a small stop on the horizontal resistance but the price should eventually break that area too.

The fundamental reason why GBPAUD went higher comes from the news important for the NZD. RBNZ surprisingly cut interest rate, which affected both currencies from Antipodes (AUD and NZD are highly correlated). NZDUSD crashed and went to the lowest levels since the beginning of 2016. Several more pips and we will be on the lowest levels since 2015 soon. The sentiment is definitely negative.

This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis

GBP/AUD is Bearish Below 1.7707

Dear Traders,

The GBP/AUD has formed a bearish move that should provide continuation only below 1.7707.

As long as the price is below 1.7707 we should see a drop towards 1.7603 and 1.7563. The market is clearly bearish and the price has formed a new low at the Wizz 8. A potential retest is in play as long as the price is held below 1.7707. Only a close above the W L4 – 1.7750 could possibly instill a higher retracement towards 1.7836. Even then the pair will be bearish and

The analysis has been done with the CAMMACD.MTF template.

For more daily technical and wave analysis and updates, sign-up up to our ecs.LIVE channel.

Many green pips,
Nenad Kerkez aka Tarantula FX
Elite CurrenSea

Sterling Shaky Ahead of New UK Prime Minister Announcement

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Although expectations remain heated over Boris Johnson becoming the new Prime Minister, the reality has the potential to weaken the Pound significantly.

Focusing on the technical picture, prices are trading towards the 1.2400 level. A breakdown below this point should open a path towards 1.2350.

GBPJPY hovers near 6 month low

GBPJPY could jump back into the drivers seat this week if fears of a no-deal Brexit reduce appetite for the British Pound.

This currency pair is firmly bearish on the daily charts and is likely to sink lower once a daily close under 134.00 is secured. With attraction towards Sterling fading by the day amid Brexit uncertainty, the GBPJPY could test 132.00 in the short to medium term.

EURGBP eyes 0.9000

A weaker Pound could send the EURGBP shooting back past 0.9000 today. A daily close above this point should open the doors towards 0.9060 this week.

GBPAUD trades around 1.7700

Renewed fears of a no-deal Brexit could send the GBPAUD below 1.7700 this week. Sustained weakness below this point should open the doors towards 1.7600 and 1.7500.


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How Would G20 summit, The US Core PCE Inflation Report and The Chinese Data Dump Effect The Markets?

The article was written on 28/06/19

There has been talk of a ‘tentative’ truce (source South China Morning Post), and while this is a market that is ready to react, the mentality remains one of wanting to see hard evidence to be truly convinced.

Keep in mind we also have US core PCE inflation tonight at 22:30 aest and a move below 1.5% in the Fed’s preferred inflation gauge will modestly increase the prospect of a 50bp cut in July. We also see the University of Michigan survey (due 00:00aest), where we can look at the 5-10 inflation expectations survey and see this currently trending lower and at all-time lows. Again, the Fed will give this survey the once over.

(Source:Bloomberg)

US inflationary metrics aside, we have China data dump due out on Sunday. It’s always worth keeping an eye on China manufacturing PMI, and adding to the G20 Summit, the data does increase the risk of gapping on the Monday open. Although we would have to see a print well below 49 (anything below 50 shows contraction) for traders to take down risk on the open. This would enviably mean selling of US500, copper, CNH (offshore Chinese yuan), AUD, NZD and small buying in bonds.

(Source:Bloomberg)

AUDUSD

The AUDUSD daily is testing the neckline of the May/June double bottom, and if we do see a positive feel in the G20 and China data, then it could well break this pivot at 0.7021. It could well be influenced by USDCNH, and should USDCNH fall, AUDUSD will rally (and vice versa).

We can see AUDUSD 10-day realised volatility has increased a touch of late, with the Bollinger bands turning out, although in absolute terms, both realised and implied volatility are still very subdued and traders are not expecting big moves. The US data is naturally a consideration, and recall, traders pay ‘carry’ (the funding differential) to be long AUDUSD; therefore, FX funds will always prefer to be short this pair if the case warrants it.

There are so many sentiment and positioning indicators we can look at, and one that the institutional spot FX traders look at closely are ‘risk reversals’. I am happy to explain these in more depth to clients, but effectively I have looked at the skew of AUDUSD 1-week call option volatility minus 1-week put option volatility. If traders are showing a greater relative demand for call options, which give us the right to buy (bullish), over puts, this skew will move higher. At this stage, it sits at negative 0.31, which shows a slight preference for downside structures. It is finely balanced though and in-line with the five-year average.

Options traders are not convinced either way.

AUDUSD aside, we have already seen a break of the double bottom neckline on NZDUSD. Again, the mentioned event risk will impact this cross too, but the set-up looks very constructive at this stage. The technical target here would be into 0.6900. One to watch.

In terms of US equities, I have focused this week on the NAS100 (NASDAQ 100). At this stage, the buyers are supporting at the 7600 horizontal support level, although, the bulls need to push the index above Tuesdays high to build any momentum. A break below the 7600 level elevates the risk this index tracks into the 6930-double bottom.

GBPAUD

GBPAUD is another pair on the radar (as is EURAUD), with price flirting with a key break below a couple of prior reversal points. While the pair could be considered somewhat oversold, a weekly close through 1.8090 would increase the prospect this pair trends lower, with the 5-day EMA defining the move.