Intraday Market Analysis: Capitalizing Over GBPAUD Gap

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GBPAUD Intraday Technical Analysis

GBPAUD intraday strategy greatly depends on the upcoming data from China (CPI). Although the economic data was not released at the time of this writing we are still able to provide the trading strategy based on a combination of the daily and 4hr chart.

GBPAUD 4hr Chart

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GBPAUD Strategy

 2.0861 represents the potential neckline of the top Head-And-Shoulders (H&S) on the daily chart. China CPI is likely to force a gap in most AUD pairs and crosses in the Forex market including GBPAUD. In a scenario of a bullish gap in GBPAUD, the key resistance levels to be eyed are 2.1210 and 2.1260. The strategy would be to patiently wait for a re-test of the one of those price levelson the 4hr chart, which may provide a clean technical entry for a re-test of 2.0861 (the neckline) with a possible breakout below, which may affirm further selling in GBPAUD.

On a scenario where a GBPAUD gaps lower, following the downtrend incurs moderate risks due to the stop loss size and possibly over-stretched intraday indicators. In such a scenario the strategy would be based on deep-buying, attempting to capitalize over the  intraday retracements. They key support level would be 2.0683, paying close attention to the 300 Moving Average (MA, in orange). Should the support give way the next key level to be monitored would be 2.0550. What we are looking for is a classic re-test by the market.

To clarify the meaning of a re-test, the price must reach either of the key levels, possibly trade below but post a 4hr close below the resistance or above the support. Although we are using the 4hr chart the strategy can be implemented on the hourly chart, which would require a Japanese reversal pattern (such as a Hammer or Bullish Engulfing for example) to paint across the key levels mentioned in this strategy. The corrective gains that are expected as a result o the of the re-test are expected to target the breached neckline at 2.0861.

We should highlight that should GBPAUD gap higher, a short position will provide positive interest at the rollover. It is difficult to estimate when those levels will be tested by the market but once they do the intraday strategy will kick into play. We will continue to monitor GBPAUD on multiple time frames. Should the market invalidate the strategy or when the strategy kicks into play and achieves its goals it will be open to all traders. Currently it is restricted to traders that have subscribed to the spot intraday plan.

10/08/15 UPDATE: GBPAUD retraced off the neckline at the time of this writing.

GBPAUD 4hr Chart

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Our trading strategy for GBPAUD is still relevant.

GBPAUD 4hr chart 20 August 2015

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GBPAUD failed in breaking below the support levels we mentioned in our trading strategy. We are therefore allowing all traders to access the analysis.

[intense_alert border_radius=”5px”] When GBPAUD strategy was published it was only available to traders that have signed up for our intraday strategies plan.

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Last Updated on August 20, 2015