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GBPAUD due a rally?


Mercury

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Following on from my thoughts on commodities and AUD plus with a ST bullish stance on GBP it seems sensible to look at GBPAUD.  This market had a great Short set up pre Brexit, which I was in but alas the Brexit margin increase fiasco put paid to a very good position...

 

After such a persistent Bear move it might be stupid to suggest a Long but all markets need a retrace to recharge the dominant move (so to speak).  GBPAUD seems to have hit a decent support zone for such a retrace and now I have a break up through short term resistance.  I can't rule out a ST retrace back down as GBPUSD is also doing but AUD is weak just now and this cross can keep running with little pause.  A confirmed break sets up an EWT 1-2 retrace before a resumption of the long term trend, which indicates a rally to the post Brexit price gap resistance zone.

 

I also attach the Monthly chart for perspective although it is not particularly useful owing to insufficient history (IG can you do something about that?).

 

Wild!  Just as I was writing AUDUSD took off down!

 



 

 

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Interesting set up on the GBPAUD hourly chart.  I have multiple Long trading trigger points since the low and another forming in an ascending Triangle fashion.  A breakout of this formation is likely to be strong so Long stop in above is my play.  My longer term time frames (inc the Daily previously posted) indicate a target in the 18000 area before a conclusion to what is likely to be a retrace and then followed by a strong drop in line with a GBPUSD drop.

 



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  • 2 weeks later...

GBPAUD retrace rally is well underway, I have been Long on this since the break of the previous down-sloping tramline and now there is a possible breakout above the upper line that has provided multiple touch resistance since it was broken through to the down side on 1 July.  As such a confirmed break with a close above, coupled with GBPUSD strength and AUDUSD sluggishness suggests my forecast for a retrace to the Brexit gap may well be on.  I am seeing a similar target on all the GBP crosses (GBPUSD and GBPJPY at least) plus EURUSD.

 

Perhaps the attainment of the gap closure will also be a harbinger for wider USD rally?  One to watch.

 



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With GBPUSD apparently trying to rally and EURUSD and USDJPY possibly joining in a general USD weakness seems to be pervading the FX markets just now.  It remains to be seen whether AUSUSD rallies or hits resistance and drops away (see separate post).  The latter would bring up the possibility or a GBPAUD rally (part 2), which of course could still happen if AUDUSD rallies and GBPUSD rallies harder.

 

GBPAUD broke through a Daily chart resistance tramline recently and is now retesting it.  If this holds then a rally up towards the post Brexit price gap is still on.  For my money a failed test of the Fib 76% and tramline on the AUSUSD would be ideal to support this.  It is going to be an interesting Triad to watch over the coming days.

 



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