GBP/AUD shaping up for a short-term drop
GBP/AUD has three weekly chart resistance signals aligning for a possible short-term drop.
Price could break the high then form a bearish reversal for entry, but any type of shooting star, bearish engulfing, or dark cloud over in the disruption zone is acceptable for an entry in GBP/AUD
- Weekly – Price retesting trend line
- Weekly – 50 EMA resistance
- Weekly – Upper Bollinger band
- 1- Hour – Candle above upper Bollinger Band
- RSI fairing to cross overbought territory
- Crucial to wait for a solid rejection bearish reversal candle
Support – 1.81860, 50 EMA, 200 EMA
Resistance – 1.84530, 1.85100
Optimal entry provides the greatest reward to risk ratio while supporting entry is a zone for reversal signals.
Optimal Entry – 1.84370
Supporting Entry – 1.84250
Candle Reversals for entry
As traders, it is your job to mitigate the risk and only trade structures that provide high probability and great reward to risk ratios.
If you are not comfortable with defined exit levels, experiment with Moving Averages to help set solid exit rules to protect your capital.
IF: Price breaks below 1.85199 – this would suggest the structure is not in our favour and would be wise to reduce exposure or close the trade until a solid signal gives us reasons to re-enter.
Reward / Reward Targets:
Optimal Entry 1.84370– Target 1 1.81860 = 3x Reward to Risk
Supporting Entry 1.84250 – Target 1 1.81860 = 2.7x Reward to Risk