Last week the GBP/AUD currency pair formed a new ascending bottom at the support level 1.6135, so the prices drew an upside trend line to buy the pair when touching it; we are vigilant for the moment this happens.
As of five days ago the pair is trading within the narrow levels between 1.6150 and 1.6270 and we expect an explosion in the next few hours, so let’s have a look at the chart.
We have a key support area 30 pips below the current price which the price might retest and rise back up again. In the same area we have the uptrend line and we can buy the pair there, but we have a resistance area at the SMA50 at 1.6250, so we have to wait for the breaking up.
The Stochastic Indicator is still giving us a sell sign so we’re waiting for the buy signal, but the MACD indicator is bullish.
The Next Few Days
So, what can we do?
From this analysis, we can buy the pair once we see it is touching the support area at 1.6135 and wait for a bullish price action candle like the pin bar. If the pair rises directly without retesting the trend line we can enter the market with long positions when it breaks the SMA at 1.6250.
We have to be careful about the upcoming hot news like the Private Capital Expenditure tomorrow from Australia and RBA Gov Lowe's Speech on Friday's morning.
