Daily Price Action
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GBPAUD Knocking on the Door of a 1,200 Pip Reversal

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Important: I use New York close charts so that each 24-hour period closes at 5 pm EST.

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Similar to the EURAUD that I discussed last week and again over the weekend, the GBPAUD has carved what could be a 1,200 pip reversal pattern.

However, there is a significant difference between the two pairs. While the Euro cross remains 300 pips above neckline support, its pound counterpart is challenging the neckline as I type this.

The fact that the GBPAUD is the weaker of the two isn’t all that surprising though. Look no further than the EURCAD and GBPCAD crosses. The latter has already confirmed its head and shoulders pattern while the former has yet to do so.

As for the GBPAUD, this head and shoulders that began forming last November has an approximate height of 1,200 pips. The neckline extends from the year to date low in January and connects with the swing low that materialized between June 4th and 5th.

That puts the measured objective somewhere in the 1.6300 region. That isn’t too far away from the August 2017 swing low at 1.6170. There is also a trend line support that connects the 2016 and 2017 lows, but that level won’t come into play until at least 1.6900.

So as you can see, if the GBPAUD confirms this head and shoulders pattern, shorts will have plenty of room to run.

That said, it’s going to take a daily close (New York 5 pm EST) below neckline support at 1.7520 to get the job done. Until that occurs, the pair is prone to consolidation following last week’s selloff.

Key support below the neckline comes in at the June low of 1.7390. A close below that would expose the year to date low at 1.7100 which is also very near the 50% retracement of the 2016 to 2018 range that spans 2,800 pips.

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GBPAUD head and shoulders pattern

Leave a Comment:

34 comments
Nelson says

Good stuff Justin. Funny thing is i was looking at the pair just before this piece in.

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    Justin Bennett says

    Cheers. It can be a tricky one to trade at times, but there’s no denying what’s happened here over the last eight months.

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      Harc says

      Awesome job Justin! Commendable efforts

      Reply
jerry says

thank you Justin

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    Justin Bennett says

    You’re welcome, Jerry.

    Reply
Jawwad says

Great observation justin thumbs up for you

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    Justin Bennett says

    Cheers.

    Reply
Alphonsus chukwu says

Thanks justin you are great in what you are doing

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    Justin Bennett says

    It’s my pleasure. Thanks for your support.

    Reply
harvestbig says

Thank you boss

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    Justin Bennett says

    You’re welcome.

    Reply
mostafi says

Very common analysis easily understand the price action of chart pattern.

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Fabrizio says

Cheers Justin. My compliments! Do you go in holiday?

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    Justin Bennett says

    Holiday? What’s that? 😉

    Reply
DAVID IFEAJIKA says

Hi Justine, great work! love your analysis and setup. very simple but precise.

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Sabelo says

Thanks Justin, I was actually thinking I’m already late to catch a trade in GBPAUD. But your analysis has opened my eyes that we are just starting the big move. Looking forward to the break of the neckline.

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Roy says

Yep. Buyers certainly tiring. Patience needed to see if we get that all important break of the neckline. 👍

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Oludare says

Justin you are always spot on I will soon register with you to be trained.

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    Justin Bennett says

    Look forward to having you onboard.

    Reply
Godwin says

Your analysis always demystifies forex. Thanks for your highly simplified approach and unflinching support to beginners like us. Bravo sir.

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    Justin Bennett says

    Glad to know it’s helping. Cheers.

    Reply
Robel says

Nice analysis

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Lee says

Will bet 20 quids you won’t get the reversal.

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    Justin Bennett says

    Lee, it isn’t a matter of what I get or don’t get. It’s a game of probabilities, and nothing more.

    If you’re bullish and spot an opportunity to buy, feel free to do so. As for me, I’ll remain bearish for now.

    I welcome comments like yours. After all, without opposing views, we wouldn’t have a market.

    Reply
      PETER says

      i have been follow GBPAUD since the day you have post it till date, respect to your analysis

      Reply
Hassan jafer says

Great work
thanks you Justin

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matt says

great job, i jst hope to get a good entry since i missed the initial entry

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thivanka98 says

Great….. thank you coach

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Hank says

What is the stop loss of GBP/AUD in case we are wrong?

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Vu Thang says

According to my IC chart, yesterday GBP / AUD closed at 1.75197.
Will it be sold or will I wait for today’s closing price?
Thank you!!!

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Lily says

Good analysis, Justin.
However, I am a bit worry about the AUD as it looks weak nowadays.
Will it be a concern?

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saams says

thanks justin

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khan says

sir what MA IS USED IN YOUR SETUP

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rueben abankwah says

hello man, i read your piece today and i have realised that there has been a break of the neckline support. thumbs up man, nice piece.

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