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Yo yo yo, ya ready to catch pips this week?

GBP/USD and AUD/USD are showing very similar setups right now.

Which pair will extend its short-term downtrend in the next trading sessions?

GBP/USD: 1-hour

GBP/USD 1-hour Forex Chart
GBP/USD 1-hour Forex Chart

Remember when GBP/USD saw a moving average crossover right before it broke its short-term uptrend?

As a great philosopher once said, Wind in my hair, I was there, I remember it all too well.

But that was weeks ago. Since then GBP/USD has traded inside what looks like a descending channel and is even presenting us an opportunity to enter on a pullback.

1.3450 is a level to watch as it lines up with the 38.2% Fib retracement of last week’s downswing as well as the trend line and 100 SMA resistance on the 1-hour time frame.

Shorting at the earliest signs of a rejection at the level would set you up for a win if Cable eventually makes new November lows.

If GBP/USD ends up breaking above the channel though, or if the bulls find enough game to break above the 1.3500 zone, then you should also have your trading plans ready for possible trips to the 1.3550 or 1.3650 previous inflection points.

AUD/USD: 1-hour

AUD/USD 1-hour Forex Chart
AUD/USD 1-hour Forex Chart

Feel like trading a comdoll pair instead? I gotchu!

AUD/USD has also pulled back from its monthly lows and is now trading around the .7350 levels.

As you can see, the area is near the 50% and 61.8% Fib lines as well as a trend line resistance that hasn’t been broken since late October.

Oh, and check out the bearish divergence on the 1-hour chart!

A short position around the trend line would give you a good risk ratio in case AUD/USD extends its downtrend and makes new monthly lows.

If you’d rather buy the Aussie against the dollar, then you’ll want to do it once you confirm that the downtrend is broken and that AUD/USD has enough momentum to hit the higher areas of interest.