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GBPAUD breaks free from months of side way movement

Months of side way movement

GBPAUD had been flattish over the last several months after a period of strong bullishness in the previous year (2013).

This month (Sept 2014), price did a WRMB of the 8 months side way move and is currently above the high of the range which could provide support.

GBPAUD currently above Support zones on Daily chart

GBPAUD currently above Support zones on Daily chart

If price is unable to stay above the upper 2 support zones, we might see price fall back into the range and retest the low.

Price up but no H4 Bullish Expansion seen

On the lower time frame, we see that week to week, although price is up, it is not showing any bullish expansion. This could lead to price looking to test possible support levels.

Bullish expansion is absent from the H4 charts of GBPAUD

Bullish expansion is absent from the H4 charts of GBPAUD

Bullish divergence and WK 1234 pattern

Overall on the higher time frames, the sentiment is still bullish with 1234 visible and a bullish regular divergence clearly shown using OsMA as a check.

Bullish Divergence seen on GBPAUD

Bullish Divergence seen on GBPAUD

In summary

  • Look for price to retest the support zones in the D1 charts (month highs) in the form of a 1234 to provide opportunity to continue the upward move.
  • Alternatively,  remember slow is good. Wait for price to have a D1 close above 1.8480-90 (21 Sept day high) which would also mean it is clearly above F6. Any retracement after that in the form of a 1234 on the lower time frame could give opportunity with a smaller SL.
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