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GBPAUD Approaching Familiar Support Level – Will it Hold?

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It doesn’t get much cleaner than GBPAUD of late when looking for swing highs and lows. The pair has been extremely consistent since putting in a major low in September of last year, trending higher inside an ascending channel that is best viewed on the daily time frame.

GBPAUD daily chart:

GBPAUD ascending channel on the daily time frame

If we move in for a closer look, we can see that we also have a horizontal level at 1.8940, giving us a nice confluent area to work with. As nice as this pattern looks for the bulls, yesterday’s price action was quite bearish, closing down almost 300 pips.

This leaves us in need of bullish price action on the daily time frame in order to justify a long position from this support area. Ideally I would like to see the market break below 1.8940 intraday, which would then leave it up to the bulls to prove that there is a setup worth taking. In other words, see if the bulls can push the market back up to support to form a bullish pin bar.

As for resistance levels, let’s first see if we get a valid buying opportunity before making any considerations concerning profit targets.

Summary: Wait for bullish price action on the daily time frame on a test of the 1.8940 area. Resistance levels to be discussed upon confirmation of a valid setup.

GBPAUD daily forex chart

EURNZD analysis:

EURNZD 4 hour forex chart

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