Daily Price Action
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GBPAUD: All Eyes on Channel Support Next Week

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GBPAUD tested a significant resistance area this past week.

On Monday I pointed out the 1,440 pip range here. Resistance is located at 1.8720 while support is near 1.7280.

When I wrote Monday’s post, GBPAUD was starting to come off resistance.

However, it took a second retest of the 1.8720 resistance area before sellers were ready to regain control.

If you missed out on today’s 200-pip drop, there’s no need to panic.

It’s only my opinion, but GBPAUD looks ready to test channel support near 1.8300 next week.

And that might be the beginning of a much larger move south.

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I favor channels for a few reasons. One of those reasons is that they are an excellent barometer of trend strength.

Let’s use the GBPAUD ascending channel below as an example.

Notice how the pair has tested both support and resistance on multiple occasions.

In late January, buyers carved a higher high and also managed to tag channel resistance at 1.8520.

That was a sign of strength.

Fast forward to this latest higher high in late February and March.

So far, buyers have not managed another retest of channel resistance. That’s partly because of the range ceiling at 1.8720 I mentioned earlier.

But it could also be an indication of weakness.

The key will be to watch how GBPAUD reacts at channel support next week and whether or not buyers can muster another leg higher.

If the pair challenges support next week before reaching back to the 1.8720 area, I would argue that a breakdown is imminent.

And if GBPAUD closes the day below channel support, it would expose the next key area at 1.7740 and perhaps even the range floor at 1.7280.

Alternatively, a daily close above 1.8720 would expose ascending channel resistance.

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GBPAUD ascending channel on the daily time frame

About the Author Justin Bennett

Justin Bennett is an internationally recognized Forex trader with 10+ years of experience. He's been interviewed by Stocks & Commodities Magazine as a featured trader for the month and is mentioned weekly by Forex Factory next to publications from CNN and Bloomberg. Justin created Daily Price Action in 2014 and has since grown the monthly readership to over 100,000 Forex traders and has personally mentored more than 3,000 students.

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  • Nasir says:

    You are simply the best. Looking forward to join ur live membership program

  • chido says:

    hello
    i tried reaching you on telegram could not because of the limitation you place ..

  • Ezeadim says:

    Hello Justin thank you so much. I made some pips using your analysis.

  • Abul Hasanath says:

    Thanks Justin for the follow up. In early US session yesterday, GBPAUD has broken a inner trend line and 1.8520 level as well in H4. I’m expecting a retest of the both levels as resistance on Monday. A low risk entry at these levels can fetch almost 250 pips up to the daily channel support. Thanks.

  • LINDIWE says:

    Thank you Justin For the confirmation i thought i didn’t draw my trendline correctly but now i see that i was right, yes it didn’t retest before so i was a little bit scared when i short the pair yesterday but i made profits, YOU ARE THE BEST MENTOR.

  • LINDIWE says:

    I t didn’t retest the resistance area before dropping

  • Chris says:

    Looks like it might drop further next week. Thanks mate!

  • billy says:

    Justin your analysis is so super I wish I joined your lessons but in future I will. Thanks for everything.

  • Zweli says:

    always on point.Justin you groomed me and now I can see my improvement. Thanks bro keep up the good job

  • Pierre Mifsud says:

    Justin I am telling you that there is a strong bearish divergence on my AMPLIFIED RSI between the 24 th Jan and 28 Feb.2019 ……so it should roll down

    • I believe you. But the price action as I explained it above tells the story well enough for me.

      • Pierre Mifsud says:

        What I really always admired of you Justin is your fairness and modesty…That makes you indeed a very special person….Take care!

        • Justin Bennett says:

          Cheers, Pierre. I appreciate the support.

          Have a great weekend.

  • Adebayo saheed says:

    Am seen myself as a better trader now because of your prompt analysis… I will become member very soon… Thank u

    • Justin Bennett says:

      Nice to hear. You’re welcome.

  • Henryk says:

    Witam Justin,kiedy przyłączyć się do handlu?.

    • Justin Bennett says:

      English, please.

  • Samuel says:

    Thanks a lot Sir

  • Godfrey Dotile says:

    Thanks for the analysis, I have been watching this pair.

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