Welcome to mid-week trading!
If you haven’t bagged pips yet, then you’re gonna love that GBP/AUD is trading inside a possible flag pattern while GBP/CHF just hit a major area of interest.
Don’t even think of missing these charts!
A moving average crossover back in early September spelled trouble for the pound bulls and GBP/AUD has fallen by about 750 pips since then.GBP/AUD has found support at 1.8150, though, and now the pair is trading around the 1.8450 minor psychological handle.
This time around, the psychological level lines up with not only the 200 SMA but also the top of an ascending channel that may or may not be a bearish flag pattern on the 4-hour time frame.
Bears who are betting on further GBP/AUD losses can short at current levels or the first signs of a bearish momentum. The 1.8300 mark is a good place to start taking profits though we can’t rule out a trip back to the 1.8150 lows.
If you believe that the ascending channel would lead to a longer-term uptrend for the pound, then you can also start buying GBP/AUD as soon as it firmly trades above the 200 SMA or bounces from a retest of the channel support.
I know we just talked about GBP/CHF but I think y’all would want to know that the pair just hit a major area of interest on the 4-hour time frame.See, 1.2500 is right around the 50% Fib retracement of October’s downswing and a major support level from July to September.
Will we see a support-turned-resistance situation? Shorting at the first signs of bearish momentum is a good idea if you’re expecting GBP/CHF to drop back down to its November lows.
If you believe that the current upswing still has legs, however, then you can also start buying the pound as soon as you see consistent trading above the 1.2500 area.