Forex Trading Library

GBPAUD Double Bottom Bounce

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GBPAUD saw a progressive downturn in fortunes at the back end of 2020. A move to the lower 1.74 region saw a sharp pullback before exhaustion saw another move again to the said level.

However, a significant bullish divergence noted on the momentum indicator saw a bounce at the support level, causing a double bottom and leading prices into the Ichimoku cloud.

The trend now looks bullish as cloud engulfment has led to the process of looking at the 1.78 once again. Should the rally continue, then Q4 highs could come into play, with the 1.85 region in sight.

An intraday outlook shows prices trading in an ascending channel, as the median regression looks to be hampering a break to the upside.

The recent bearish divergence could worry bulls, as a move below the bottom channel could lead to significant downside. Should prices touch the top border of the Ichimoku cloud, we could see prices wane further below the mid-1.76 area.

The next test would then be the recent support lows of the 1.76 region, which could then lead prices lower. The downturn would negate the ascension, as monthly lows could ensue.

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