The bias has changed from bullish to bearish after the price broke below the 200 EMA. The current upside correction might be very attractive for the long term sellers.

Disclaimer: The analysis presented in this article is for educational purposes only and should not be considered as financial advice.

This analysis was done on MetaTrader 4.

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Trade Idea Details:

GBP/AUD symbol

Trend: Bearish

Key support levels: 1.9510, 1.9220

Key resistance levels: 2.0000

Price Action: on the 4-hour chart, the price broke below the previous level of support at 1.9663 and the 200 Exponential Moving Average at the same time. Pair finally started to produce lower lows and lower highs, suggesting further price decline.

Fibonacci, applied to the corrective wave up, after the 200 EMA breakout, shows that 191.8% Fibonacci level could be the key support level and potential downside target. This level corresponds to previous support and resistance throughout January 22 – February 12, 2020.

On the 15-minute chart, GBP/AUD returned to the price are where the downtrend trendline has been rejected. The RSI oscillator formed a bearish divergence, which could result in a downtrend continuation. And finally, on the 1-hour chart, the price rejected the 200 Simple Moving Average cleanly. All-in-all, GBP/AUD is currently at the strong resistance area, which could be a strong supply zone in the mid to long term.

GPBAUD 4H Chart

GPBAUD 15M Chart

 Potential Trade Idea: the GBP/AUD is trading near 1.9930. The 2.000 – 1.9900 area could be considered as a selling zone with the stop loss at 2.0100 or above. The exit signal could be a 4-hour break and close above the 2.0000 key psychological resistance. The downside target is at 161.8% Fibonacci retracement level which is 1.9220.

• Potential StopLoss near 2.0100
• Potential TakeProfit near 1.9220