back in gbpaud – long position opened @ 1.5489

1 mins. to read

We have played GBPAUD twice succesfully in recent months and, given the 4 cents retracement in the pair this last few days, think a fresh long position is a good trade at this level. Targetting 1.60 before Xmas.

GBPAUD has a high inverse correlation with global stock markets too and so it is a useful natural hedge in the portfolio against our predominantly long positions. PPP actually dictates a value north of 2 as more appropriate and with the Aussie central bank leaning into weakness of their currency, the odds of a continuation of the base building seen below and a move higher look good to us.

The weekly chart below shows numerous positive signs – firstly, the key moving averages I use – the 19 & 37 week exponentials have crossed through each other and turned up and the price is still above these. Only a reversal down below 1.5240 would negate this. The RSI has come back to the 52 level too and so there is plenty of room for a renewed rally from this level now.

We can also see how the pair is trapped in a trend channel with boundaries between 1.44/5 and 1.60/2 – a move through either level will set off a move of 15c-17c and I personally doubt that we will see a 1.29 handle on GBPAUD. If so, forget the gap year trips. Period!


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