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GBPAUD Dip Offers Potential Buying Opportunity

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GBPAUD has had quite the run over the past two and a half months, gaining more than 2,000 pips since the May low. Usually when we talk of those kind of extreme numbers we think that the best course of action is to stay on the sidelines as the market has likely overextended itself.

However in the case of GBPAUD, the approach is quite different. Yesterday’s session was no doubt an impressive one as the pair settled 280 pips higher from the day’s low. But something more significant happened – the pair managed to close above 2.0980 for the first time since March of 2013, when this level served as support and resistance on several occasions.

Of course the question now becomes, can the pair hold this level as new support? While the answer remains elusive, the next two days should certainly provide us with some clues.

Summary: Watch for a buying opportunity on a retest of 2.0980 as new support. Key resistance comes in at 2.1440, 2.1735 with an eventual target of 2.2200.

GBPAUD rally on the daily chart

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1 comment
Justin Bennett says

The prudent thing to do when facing a major news event such as RBNZ is to sit on your hands, which is what 90% of Forex traders don’t do.

Cheers,

Justin

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