Trade of the Day: GBP/AUD

By: Dima Chernovolov

GBP/AUD continues to fall inside the daily Flag chart pattern which was identified previously by Autochartist. Autochartist rates the quality of this Flag at the 8-bar level – which reflects the sharp Initial Trend (10 bars), above-average Uniformity (6 bars) and strong Clarity (8 bars). GBP/AUD is expected to fall further inside this Flag – in line with the earlier downward reversal from the key resistance area shown below.

As can be seen from the daily GBP/AUD chart below, the price earlier reversed down from the resistance area lying between the key resistance level 1.8400 (monthly high from June), upper daily Bollinger Band and the 61.8% Fibonacci correction of the previous downward impulse from May (“flag-pole” of this Flag).  The proximity of this resistance area increases the probability GBP/AUD will continue to fall inside this Flag.