GBPAUD: Buy Opportunity and Plan for Shorting
British Pound/Australian Dollar FX:GBPAUD
The price reached an important support zone formed by the main uptrend line, SMA200, and 1.81000 support level . What does it mean? It means that we have two trade opportunities in both directions. Should we buy or sell – it will depend on the price action in the zone and the direction of a breakout. Let’s make it clear.
If the price bounces from the support zone and breaks the local downtrend line, which acts as a signal line, we will be able to open long positions. The estimated entry zone should be between 1.81550 – 1.81800 levels. Don’t forget that the price will have to break the downtrend line first and only after that it will be possible to buy. Stop-loss orders must be placed below the support and the local swing low – it is 1.80800 level. Profit targets should be placed at 1.83000 resistance and the main downtrend line.
For a case, if the price breaks the support zone , it will be possible to open short trades. The estimated entry should be below 1.80800 with stop-loss orders above the local swing high and 1.81000 resistance level . Profit targets should be placed at 1.79000 and 1.77000 support levels.
If we look at the indicators, we will see that the market is going to move upward. RSI is not far from the oversold zone, and it confirms the price reversal. MACD histogram supports the upward movement. DMI does not show that sellers are active, and they can break the support zone .
In spite of all these signals, the market can move in another way. Don’t forget to trade properly!
Source: TW DLavrov