Great Britain Pound took all the advantage from the decrease in cases of Covid-19 as compared to the surge in numbers of infectants until last week. British stock market had to pay a heavy price for Prime Minister Boris Johnsons careless policies of undoing restrictions on Covid-19 precautionary policies while the country was facing high figured mortality rate. Now the situations are setting to get better along with optimism being developed after the European Union haulted its legal actions against the U.K for over the NI protocol. Australian dollars weakness became another plus point for cables to gain its routes towards daily new highs and weekly as well. GBPAUD has stepped into head and shoulder pattern in weekly time frame and has set some indications for an awaited correction in shape of fall. 

The pair is trading near neutral sentiment zone of supply and demand, yet weak in momentum to provide any further bullish stance before facing a bearish corrective reversal. 

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

According to our elliot wave analysis, GBPAUD has completed its impulsive 5 wave bullish structure of higher degree under intraday and weekly time frame, yet we dont have a closing or a proper stop to the hawkish move for the pair is still in its highest zone - not indicating any signs of taking a pause here. So we will have to wait for its closing and look for hints as the market takes a reversal for correction. We have our 50% fibb retracement level on weekly chart which can also be taken as a sign of bearish reversal, keep in mind the correction will be made of a higher degree in daily time frame to step out of overbought conditions with RSI trading near 70. So wait as the market makes a bearish corrective wave 'a', will be our first fractal confirmation for executing our selling entries. 

GBPAUD Weekly Overbought Conditions

Jul 28 2021