Trade of the Day: GBP/AUD

By: Dima Chernovolov

GBP/AUD continues to fall inside the clear 4-hour Down Channel chart pattern which was previously identified by Autochartist. Autochartist rates the quality of this Down Channel at the 5-bar level – which is the result of the strong Initial Trend (7 bars), lower Uniformity (3 bars) and medium Clarity (5 bars). GBP/AUD is expected to fall further inside this Down Channel – in line with the earlier breakout of the support area shown below.

As can be seen from the daily GBP/AUD chart below, the price earlier broke below the support area lying between the support level 1.8440 (former resistance from April) and the 50%Fibonacic correction of the previous upward impulse from April. This price zone is acting as resistance zone after it was broken. The proximity of this resistance area increases the probability GBP/AUD will continue to fall inside this Down Channel.