Expecting a small retracement on open before continuing onto the current downtrend.
Also mindful of a a gap on the market open, will dictate possible entry, but my bias for this pair is short, targeting support level 1.67000 in extension. First target 1.70812
Last weeks weekly candle showed that GBP/AUD finished the week higher then when it started but any encouragement that this gives to GBP/AUD BULLS is misplaced as the price hit 1.6722 earlier in the week and now stands 200 pips lower. Technically the picture is extremely BEARISH on all key time frames and its hard to see how the G/A rallies from these levels.
this morning we could have a chance to get involved in this trade. Now i'm going to explain you why:
first of all, the big yellow box represents a daily structure level, this level happens to line up pretty well with the 618 retracement of the bigger daily leg.
In this cases i seek for trading opportunities down on lower timeframes: on the hourly chart...
When you son in together the WEEKLY / DAILY / 1HR you can achieve great risk reward trades such as this 1:5
confluences c legs on weekly , daily , 1hr , ma's , pivots on 1hr
weekly bearish engulfing , daily shooting star , 1hr reversal
Looking for the pound to strengthen and then to short around 1.78 which will be a confluence of previous resistance and 200 moving average. It's also around the 38.2% retracement since the trend in May.