We’ve been tracking this 1,440 pip range on GBPAUD since March 4th.
The area between 1.7280 support and 1.8720 resistance has kept the pair contained since August of last year.
Extensive ranges like this one can offer excellent opportunities.
But the question is always the same…
When is a good time to enter?
That’s a particularly tricky question with a cross like GBPAUD that can become quite volatile at turning points.
Look no further than the price action in March.
This is where channels can offer some clues. In fact, you could plan an entire trade around nothing more than a channel like the one below.
A daily close below channel support near 1.8450 would re-expose the range floor at 1.7280.
Remember that I use New-York-close Forex charts so that each 24-hour session closes at 5 pm EST. That gives me five equal daily candles each week.
These charts are required for trading price action from the daily and 4-hour time frames.
It’s that simple.
Now, there are no guarantees that GBPAUD will reach 1.7280 upon closing below channel support.
Keep in mind that the pair has been trending higher since October 2016.
That means this latest sideways movement since August of last year may only be a temporary pause in the uptrend.
However, if channel support does give out over the coming sessions, I suspect GBPAUD will at least pull back to 1.7930.
You can see how this level has served as a pivot for the pair since December 2017.
And while that certainly isn’t the same as a move to 1.7280, a pullback to 1.7930 still offers traders 500 pips of real estate.
That kind of potential is worth keeping an eye on.
In summary, a daily close below channel support near 1.8450 would set our sights on 1.7930; I won’t entertain a short until then.