GBP/AUD Daily chart 11/25/2012 8:00PM EST
Channel: The GBP/AUD has been in a falling channel since the October high of 1.5880. Since attacking the 1.52 handle, there has been some consolidation that brought price action back to the 200-day simple moving average, and the channel resistance.
Downside: So far, these factors have been respected as resistance. If they hold, there is further room to the downside if price pushes back below the 1.5245-1.5250 pivot area that goes back to 2011. The first near-term target below is the 1.5156, 61.8% retracement level, but a more important pivot is down to 1.4970-1.4975 area, just above the 78.6% 1.4960 handle.
Sideways market, previous trendline breakouts: As we stalk the falling channel, there are a couple of key observations. 1) The GBP/AUD is trading sideways in the daily chart as reflected by the RSI’s travels between 30 and 70 and the moving averages (200-SMA is flat, price and other SMAs whip back and forth). 2) When we had very clear trendlines holding these bullish and bearish runs across the 200-day SMA, the eventual break of these trendlines have been followed with quite extensive reversals – this has been the case all year.
Fan Yang CMT is a trader, analyst, educator and Chief Technical Strategist for FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.