GBP/USD has actually been respecting that there descending channel since early October. And since the most conservative way to play a descending channel is to look for shorting opportunities near the top of the channel, then that means that conservative forex traders are out of luck on this one given that price is currently at the bottom of the forex chart pattern. Stochastic is already pointing up and moving away from the oversold area, though, so bulls may be getting on board again soon. But given that price has been closing outside the channel and previous attempts to send the pair higher have failed, there’s a small chance that price will continue going lower.
Price is presently going down after failing to break past resistance around the 0.7400 major psychological level. The bears are probably gunning for support area at 0.7310, and if the aforementioned support area holds, then we got us a nifty 90-pip trading range or rectangle. Looking at our technical indicators, the moving averages are coming closer together for a potential cross-over into downtrend mode while stochastic is already in oversold territory. Stochastic is still pointing down, however, so forex traders who are bearish on the pair may not be out of steam just yet and a possible break past support at 0.7310 is in the cards.
GBP/AUD recently had an upside breakout from a descending channel that was respected since early December 2015. However, the pair’s bullish momentum got sapped when it reach the price area of significant market interest around the 2.0520 handle. Also, the moving averages are still in downtrend mode, and the 200 SMA even acted as dynamic resistance to boot. In the process, a bullish flag has now formed. The height of the flag and its pole is around 300 pips, so a potential topside breakout could last for the same amount. Do note that the 2.0520 handle could hold, however. In which case, price is likely to go back down. Anyhow, just make sure to practice proper risk management should you find a trade based on this or any of the other charts, alright?
Forex Chart Settings:
To get the complete picture and avoid getting blindsided by economic data, you also have to do your fundamental analysis. Lucky for us, Pip Diddy fills us in on what we need to know about fundamentals with his Daily Forex Fundamentals