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We have a laundry list of great setups to go over for next week, so let’s jump straight into it.
First up is GBPAUD. The pair has been trading within an ascending wedge pattern since September of 2014. The market looked quite strong during the last rally up to channel resistance. However that strength was quickly met with selling, and lots of it.
If you’ll notice, the first test of channel resistance in September of 2014 left the pair moving almost sideways to channel support. However this last retest of channel resistance resulted in a much more aggressive decline. This could be a sign of things to come.
Last week’s decline also left the pair with a bearish continuation pin bar that is now resting on key support. A break here could send the pair to the next level of interest at 1.8175.
In addition to the continuation pin bar, the weekly chart also shows what could be a potential double top. Of course we’ll need to see a break of neckline support to confirm the pattern.
GBPAUD weekly chart:
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So what’s the plan for next week?
We should keep an eye on the 1.8383 level. A break on the daily time frame could present us with a selling opportunity. The level is also being respected on a 4 hour basis, so a 4 hour break below 1.8383 could provide a short setup for the more aggressive trader.
It should be noted that the pair is currently at a strong support level, so waiting for a break and close below the current support level is key in order to confirm a true breakout opportunity.
Summary: Wait for a 4 hour or daily close below 1.8383 and then watch for bearish price action on a retest as new resistance. Key support comes in at 1.8175.