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The GBPAUD is playing out beautifully for us so far.
I wrote about the potential for a bearish reversal on Tuesday of last week.
At the time, the pair was trading at 1.9110.
I managed to get a small short position on from 1.9100, which I also mentioned in the member’s area.
If you saw Saturday’s Forex forecast video, you know that 1.8900 was likely to be a factor on the way down.
Here’s the GBPAUD segment of Saturday’s video:
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Fast forward to today, and you can see that the GBPAUD is now below that 1.8900 horizontal level.
That means any retest of the area should attract sellers.
As always, though, it’s going to depend on what type of price action develops.
A rejection from that 1.8900 area could take the GBPAUD down to the more critical level at 1.8700 or thereabouts.
That’s the neckline of what could be a head and shoulders pattern.
Just remember that it’s going to take a daily close below that 1.8700 area to confirm the bearish reversal pattern.
Such a close would also expose 1.8420, followed by 1.8100 and 1.7800.
That 1.7800 area, by the way, is the measured objective of the 900 pip head and shoulders pattern.
If we see GBPAUD take out the (new) 1.8900 resistance area and move back to recent highs at 1.9150, it could negate the bearish scenario altogether.