Throughout the last month and a half there has been a glorious trend occurring in the GBP/AUD that was extremely consistent and strong, but recently the trend line that has supported it has been broken. Predictably, as we approach the end of the year liquidity has dropped, strength of trends has dwindled, and markets have taken to more sideways price action. Does that mean that the trend in GBP/AUD is due for a turn? Perhaps, but finding another reason for a correction could make it more compelling.
In addition to the recently broken trend line support (Figure 1), there is a Bearish Gartley pattern that appears to be setting up to complete near where the trend line extends (Figure 2). Often times, when a support is broken it then becomes resistance for future price action, and if this dynamic plays out here, it could set up dual resistance near 1.9220. Considering price action may be mundane over the next couple weeks, it would be wise to take the wait and see approach. Therefore, if this pair has a last gasp rally up to resistance, a turn lower may very well be in store.
Source: www.forex.com
Source: www.forex.com
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