Since reaching the all-time lows in 2013 the Aussie has seen a 10-month bullish streak, followed by an 8-mnth correction and then back to an 11-month bullish rally. After failing to break above the Spinning Top 3 months ago (refer to MN1) and forming an inside month I had wondered if we were about to enter a choppy sideways correction. So far I suspect this is what we are seeing, so we could see GBPAUD drift lower over the coming month/s whilst the correction plays out.
The Weekly timeframe also suggests we are within a correction, having printed a Dark Cloud cover last week and now trading in the lower half of last week's range.
Today, following strong employment data from Australia, we have seen an aggressive bullish engulfing candle which now trades beneath the monthly pivot and cluster of eMA's.
If you refer to the 'current range' chart you'll also notice that we have traded beyond the typical daily range so I suspect it is prone to a pullback. And the resistance zone around 2.13-142 is an ideal place to consider sell-limit orders to anticipate such a pullback and jump on board the near-term bearish bias towards 2.110-13 support zone. Depending on stop placement this may achieve a 2:1 r/r.
However if you are feeling a bit more gutsy we could even look for a run towards 2.11 and 2.080 as price action suggests further downside could be on the cards, judging from the sloping resistance and two rounding tops.
GBPAUD downside accelerates
Today's strong employment data for Australia has seen the Aussie power ahead against several major crosses and GBPAUD may have presented a decent short-term candlestick opportunity for the week.