GBP/AUD: Bearish Momentum

In today’s analysis, I am using Structures, Fibonacci trading, and Elliot wave.

Pound-Aussie in Daily TF obviously is in downtrend, this bearish move of GBPAUD was started on 08/08/2015. A very nice downtrend channel was forming and it gives us a selling opportunity.

Here we are!

GBPAUD: Daily TF

If we drag the fibonacci from A to B leg, it can be identified that the market makes a corrective wave and retraces from 0.618 fibonacci level i.e: Blue fibonacci. Then it will continue to the downside. The market seems forming ABCD Pattern in downtrend and heading toward psychological support 2.000.

If we drag the black fibonacci from B to A leg in using Fibonacci extension, we can see this significant level around 1.27 and 1.41 levels where the market will heading into.

When we analyse this pair any further, the Elliot wave is forming the final wave (v). Usually this wave has the same length with the (i) or (iii) wave. However, the D point is the main target and become potential reversal zone on GBPAUD. Additionally, EMA (30) still above the candles which indicating more bearish momentum.

GBPAUD Weekly TF

On weekly TF, the chart is clearly showing that the market always makes a corrective move to the major support i.e Blue lines. It signifies that currently the market has to go around psychological level 2.000 as a support.

If we drag the Fibonacci retracement from swing low 22/03/2015 to swing high 23/08/2015, the golden ratio 0.618 level also indicates the same target i.e green square. Therefore, this analysis eventually shows that the market will go around that level and given us a good opportunity to take Short position.    

Good trading and happy New Year!