Price is right down at the extreme lows on the GBPAUD on both the 4 hour and the daily price action charts .
As you can see on the chart below, price formed an inside bar (“IB”) on the daily chart – this is a pausing or consolidation pattern we have often discussed in this blog. This sort of quick breather in the price action is a very common order flow pattern, especially in a market such as this where such a large and strong move has been made.
These quick pauses give the market a short pit stop and allow traders who have made large profits to exit their positions and cash in their ‘paper’ profits, or at least lighten their positions. Obviously until a trader cashes in their profits and actually exits the market, anything they have made in profits is only ‘potential profits’ and could just as quickly turn into a loss.
That is why in strong trends you will see a lot of these pauses and a lot of consolidation and continuation. The market NEVER moves in a straight line and you can learn to take advantage of that.
I talk about this in a lot of detail in the recent trading lesson video you can watch at:
Crushing Fears & Hunting Trades When Price Action is Making Huge Moves
Whilst price on the GBPAUD is now down at the swing low, it has moved into a major weekly price flip level that has been a long-term proven support and resistance level. Although price is a long way from showing signs of making reversals just yet , if you are bullish, this is definitely something to watch – this is a major level and there is a lot of space if price can gain momentum and start moving higher.
That being said, until I start seeing some convincing reversal bullish signs like 1,2,3 trend change or the overhead level breaking, I am looking for bearish trigger signals to get short in this market on both the daily chart and the smaller intraday time frames.
As the 4 hour chart shows below, if price can make a quick pull-back into the overhead level, then it could be a high probability level to hunt for reversal trigger signals. However, we must keep in mind that we would need to see A+ high probability trigger signals to confirm any potential bearish trade setups, like the ones we teach our members in the Lifetime Members Price Action Courses.
Daily GBPAUD Chart
Daily GBPAUD Chart
4 Hour GBPAUD Chart
Related Forex Trading Education
good analysis Johnathon