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GBPAUD: Rounding Up Different Possibilities

Overview using the higher time frame

Price at support on Weekly GBPAUD charts - 3 Apr 2014

Price at support on Weekly GBPAUD charts – 3 Apr 2014

  • Price is currently close to support of previous turning points.
HS pattern visible on GBPAUD D1 chart

HS pattern visible on GBPAUD D1 chart

  • On the D1 charts, we can see that month to month price had been stacking up.
  • Subsequently, a head and shoulders pattern was formed suggesting a reversal.

Looking at the H4 time frame we look for the trend and strategy to use

GBPAUD plots downward move on H4 charts

GBPAUD plots downward move on H4 charts

  • Week to week, there are bearish expansions with the boxes down, this determines that the trend is down.
    • This would lead us to check for a trend continuation strategy (H4T)
  • In the current week, we also can see a possible 1234 pattern forming.

But what about the supports?

When price is near to the support, it would be prudent to do trade management. If price closes below support then this levels will become resistance to push price lower.

And if the supports are not broken?

Then we might have a different view of things and could possible look to continue the upward move on the D1 charts.

If price remains supported, D1 shows possible 1234

If price remains supported, D1 shows possible 1234

 

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