Jump to content

GBP/USD/AUD Triad showing short term reversal


Mercury

Recommended Posts

I am short term bullish on GBPUSD, seeking 13,600 minimum as a target but the move is complex and fraught with difficulties.  I now believe GBPUSD is in a complex retrace, signaled by multiple reversing A-B-C moves inside a range.  I believe that contrary to low timeline signals this market is currently in an A-B down rather than a 1-5 up and when this ends a wave C up to 13,600 will be triggered, possibly by no USD rate rise next week.  Decent UK retail stats did not really spark a rally and Fundamentals traders may point to the BoE data in a 1/2 hour or so but everyone expects no action there so why the wait?

 

The daily chart indicators suggest a downward move has not yet completed and could travel back down to the higher weekly tramline (purple) and the 13,000 area to complete the B wave.

 

The AUDUSD, conversely, is showing strength signals after a drop through the Triangle.  In an uncertain market, which I would suggest this certainly is, a retrace back for a retest of the breakout zone is eminently possible here, especially with some strength in commodities (see HG copper).  There are also lower time frame rally signals so looks set for a short term bounce.

 

To complete the GBPAUD is showing some short term softness.  Again I am medium term bullish on this pair as I believe we are in a big picture retrace to Wave 2 (pink).  However it seems likely that we have only just hit wave A so a return and retest of the tramline breakout in a Wave B is possible.  All this fits with the other 2 scenarios or this Triad.

 

Therefore while I remain medium term bullish GBP I am short term bearish.  The big trade will not present until the GBPUSD retrace back up to the Brexit price gap is done in my view.  A Fed rate rise next week cancels this analysis and reverses it but what are the chances.  I prefer a no rate rise scenario with a strong rally against the USD at that point.  Note AUDUSD could continue to rally through the Triangle line while GBPAUD also rallies so watch out for that wrinkle.

 



Link to comment

Archived

This topic is now archived and is closed to further replies.

×
×
  • Create New...