GBPAUD is a parabolic pair, which usually moves in the Asian and London session. We have an opportunity on this pair to go short as the current levels advise.

- Market structure: GBPAUD has been making HH’s and HL’s until it tapped 1.8650 and rejected the area multiple times. We also experienced a fakeout at this level of resistance. The prices then opened and closed below the resistance level, therefore, verifying the resistance as a valid one and rejecting the area. The next major support on GBPAUD is at 1.8500, which will act as our first target profit.

- Trendline: At the resistance of GBPAUD, there was an ascending wedge formation. The upper band of trendline resistance has been tested 3 times and rejected the 4th time with a bearish pinbar. Below the current market, we also see an ascending trendline, which as been broken triggering a breakout sell. This is an added confirmation of a bear leg after the market has induced a breakout sell closing below the resistance.

- Retracement: After the trendline breakout sells, we see prices bounce back to the resistance which is also in confluence with the retracement levels of 75-78.6%. This is the third confirmation to go short on the pair. The retracement being tested after a trendline breakout is a good indication for the market to carry on in the breakout direction.

- EMA's: Both EMA’s are bullish right now. EMA 50 had been tested after being broken whereas, EMA 200 retest is still pending after the breakout. We will target the retest of the EMA 200 for the corrective bearish leg.

- RSI/CCI: The oscillators are slowly descending towards the bearish region. RSI is at 52. Below 50, the bearish region is induced. CCI is currently at 60 and the curve is downward sloping. Hence, we anticipate both oscillators falling in the bearish region as market continue to move down.

On GBPAUD, we have a good setup. Once market is rejected from retracement after trendline breakouts sell, usually the probability is high for the market to continue in the breakout direction.

GBPAUD drop coming

Jul 21 2021

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