GBP/AUD is seeing a much anticipated retracement after melting out of a series of consolidation ranges that kept price action in between since mid June. Subsequently this pair has created a new lower low before initiating this correction that is taking place which seems to be coming to a halt as we can see a bearish divergence on the H1. RSI illustrates that price is losing its momentum and as a result becoming exhausted during this short uptrend, which comes at a time where the 61.8 golden ratio fibonacci is approaching and price action seems to be retesting and rejecting the previous upwards channel which was formed on the D1 and broke out of last week. Also on the H4 a pin bar candlestick has been formed earlier on today following by a spinning top and pin bar on the hourly as well. These are all indicating towards a short position to be taken as we could see a reversal, hence a continuation of the overall downtrend for GBP/AUD.
The target for this trade setup would be around 150 pips taking it to the major support at 1.7400. Stop loss can be set at 75 pips giving this trade a 1:2 risk/reward. After this level is met, i do see GBP/AUD matching the previous low of 1.7300 and if this is breached, it may take this pair lower to the 1.7100 region.
The target for this trade setup would be around 150 pips taking it to the major support at 1.7400. Stop loss can be set at 75 pips giving this trade a 1:2 risk/reward. After this level is met, i do see GBP/AUD matching the previous low of 1.7300 and if this is breached, it may take this pair lower to the 1.7100 region.