GBPAUD has been in an uptrend and now retracing for a further impulse upwards. We will analyze this pair on H4 to get the whole picture.

- Market structure: Previously, GBPAUD broke the resistance at 1.8860, forming HH and HL during the process. After the breakout of the resistance, it is now testing the support, which was earlier the resistance. The previous h4 candle was a full bearish candle, which entails that at this support, bearish pressure still persists. We will avoid buying at this level unless we see a solid confirmation of price action.

- Trendline: Earlier, ascending trendline was broken and market validated it. Given that this breakout sell took place in an uptrend, we have to be varying of selling until the direction changes after breaking out the support.

- Retracement: The golden retracement level is at 1.8786, which is below the support level and not in confluence with any other factor. Currently, the support does confluence with the 50-61.8% levels of retracement.

- EMA's: Both EMA’s are above the current market prices and are bullish. Both EMA’s have been broken as well and retested several times. What we can see is that another retest happens at the golden retracement area where we can look for intraday longs. Other than that, till the EMA totally overlays on the support, its risky to buy.

- RSI/CCI: RSI is in a bullish region whereas CCI is in a bearish region at

-100. We need either of them to be in the bullish zone for confirmation. Right now, only RSI is.

GBPAUD does not present a solid setup at the moment. We will have to wait for further development on price action before taking any decision. Till then, we will just watch the pair and see what happens. If market happens to break the support, the best bet would be to short it till the lower support as shown in the charts.

Neutrality on GBPAUD

Aug 02 2021

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