27 Apr Update To AUD:GBP Analysis; 27th April 2014
Having previously discussed a long term AUD:GBP set-up in this post in its earlierst stages back in February it’s time for an update as price action continues to take the support the trade idea.
This trade could be the pre-cursor of a future box trade meaning this is quite a wild long term call where 2 future trends are being predicted.
The first trade is a swing long from near current levels ultimately targeting 0.6184 future resistance from where the trend may reverse back down again. Before considering entry into this first trade we needed to see a higher high and this is now in place. From that first higher high we are now seeing a pull back and this is where a possible trade entry can be made as shown in this 4 hourly chart:
Here’s a zoomed in chart showing the possible area of support around the current price print but MACD isn’t supporting a long entry just yet so I’m continuing to hold off entering the position just yet:
Before taking such a trade its a good idea to look at the same chart inverted, so in this case we can open up the GBP:AUD chart which shows the precise opposite price action to the AUD:GBP chart.
What stands out in this chart is the fact that every single swing high has a well defined point to it, each with exposed candle wicks as the sellers jumped into the trend in force. At present we don’t have that on the current “high” meaning this trade, although quite viable, doesn’t yet have everything in place for a confident entry:
Despite that I think the time has come where this one needs to be checked on a Daily basis until such a time the trade can be taken with a view to profiting from an AUD:GBP rally right up to the 0.6184 region. If this trade plays out, it will have been well worth the wait.