FxWirePro: GBP/AUD supported at channel line – targets 70-80 pips northwards

Dear readers, we would like to run you through our recent write up before begin with this derivatives strategy, we can vouch for sure that this would give us the hints on trend directions of this pair.

Check out our previous analysis by clicking here.

Well.., you may now be able to cope up with the perplexity of these puzzling swings after reading above article and compare the same with current swings.

If you evaluate the prevailing price of GBPAUD (spot FX 2.0431) with the price on 5th October (2.1571) we would certainly arrive with two important points.

Firstly, one would not be interested in current upswings, no matter what.

Secondly, bears are insanely in love with the downtrend lasted for last six months or so and no doubt it is still available in long term.

But there exists the genuine perplexing scenario, isn't this absurd to expect either continues uptrend for last two and half years or nonstop steep down tunnels continuously, as a result we think it has just made a 23.6% retracement (pink horizontal lines) when pair made highs of 2.2372 from 1.4410 during the process of saucer formation that we saw in our recent analysis (see above link).

For now, on weekly graphs it has tested channel line support at 2.0187 to bounce back.

This bullish view is supported by volume contraction on rice declines as well (see grey shaded areas).

Currently, it looks like the minor uptrend is back again to target the channel line resistance that would be probably around 70-80 pips on upside, that in turn these price gains could be deemed as recovery swings.