GBP/AUD Steep Trend Line Marks Bearish Zigzag

Nenad Kerkez

GBP basket has been moving a lot since Brexit vote and mostly it has been sold into rallies as I suggested. Our latest Session Recap GBP/USD trade analysis and setup has provided us with more than 120 potential pips. As our correlation table suggests, the GBP/USD and GBP/AUD have a very strong positive correlation so they move in the same direction.

The GBP/AUD is technically very bearish and we can see it on our chart. Steep trend line, L3, bearish order block make POC zone 1.5880-95. Traders should watch for any short term rejection of POC. But I would suggest paying attention to POC2 because the first POC’s trend line is to steep so it could break. If trend line breaks we could see retracement to POC2 – 1.5960-90 (DPP, H3, EMA89, X-cross). Have in mind that POC zones are wider due to ATR of the pair that is much higher than any major cross, but the chance to capture even more pips is exponentially higher if we get in the right direction.
GBPAUD Hourly Chart

GBPAUD Hourly Chart