GBP/AUD Anchoring out of a Falling Channel

by Admin

Awards 2013

GBP/AUD 4H Chart 2/28/2012 9:52AM EST


Falling Channel: GBP/AUD has been very bearish throughout February, trading in a falling channel from 1.5352 to 1.4623. The momentum became bearish as the 4H RSI has tagged 30 several times but always held under 60. The moving averages were in bearish alignment as well, until it found support at 1.4623. Now they are converging as market switches from trending to distribution mode in the 4H chart.

In this past week, the GBP/AUD made a double bottom at 1.4623, and then rallied from it to break above the falling channel.

Bottoming: The resistance of the double bottom has been tested a few times since the breakout, and has held as support. This is a sign that a bottom is being established. The 1.4988 level is a 50% retracement target as well as a swing projection. The overall trend is still bearish, so be careful not to expect too sharp of a rally, but if it comes that’s great.