GBP across the board strengthened from Monday. But AUD strengthened more compared to GBP. AUD is correlated with USD. Both gained pace this week start. As the impact has been absorbed, we will look for the GBPAUD buys, in continuation with the trend.

- Market structure: The current structure on GBPAUD is bullish as no LL’s and LH’s have been formed or validated yet to make it a bearish structure. Market stands at the 1.8910 level of support. This support is a retest of the earlier order block formed last week. Market moved up from this level without retesting it, hence, it dropped back to fulfill the orders.

If market moves up from here, we will have the resistance as our target. The resistance level of 1.9100 will be our profit target.

- Trendline: GBPAUD has only one trendline and that to an ascending trendline, which has been broken, inducing breakout sells. After the breakout sell, market continued plummeting. The breakout sells had been validated but the only precondition it has not yet filled, is the breakout of the support and forming a bearish structure.

- Retracement: The golden retracement area of 75-78.6% is below the support level and does not align with it. On the support level, we have a 61.8% retracement level. The golden level is 50 pips below the 61.8% level and has to break the structure to tap that. We might even see a fakeout/wick to this golden area, that’s why, our stops are below that.

- EMA's: GBPAUD is ranging between bearish EMA 50 and bullish EMA 200. EMA 50 was just broken recently and hasn’t been tested yet. On the other hand, we have EMA 200 resting lower from the support. It may tap the EMA 200 and pounce back up. But the problem lies; the EMA 200 is way low than the support. Due to this, we cannot have any confluence factor with the EMA at this long position trade.

- RSI/CCI: Both the oscillators are moving away from extended over sold conditions. RSI is at 33 and CCI at -119, moving back up from the -192. GBPAUD has a hidden bullish divergence, which spans over a larger time duration. This divergence has the tendency to surge the pair. The criteria for the divergence falls into place and both of them have the same area divergence.

GBPAUD is at a good level buy from this current support. The only doubt we have is of having lesser confluences and confirmations. We only have support, retracement and oscillator divergences for this setup. Risk minimum on this trade and if support is broken, we take the stops.

GBPAUD buys from 1.8900

Aug 24 2021

Stop Loss -0.49%

Holding time 2d22hr

1.89150

Entry price

1.88220

Stop loss price

3