GBP/AUD – time for the bubble to burst?

At last.  The relentless rise of sterling has paused a little.  I have as you know been “nipping in and out” of this currency pair in the last couple of says, expecting it to retrace part of the amazing rise. 

I nibbled at it yesterday (and at GBPUSD) and have assembled two short positions using the daily and weekly charts over the past couple of days.  I have been hoping for a longer hold than the 3-6 hours I have had on my larger, intraday positions. 

Finally this mornings inflation news for the UK didn’t point towards an interest rate rise schedule as people expected ….. and the pound started to retrace the gains. 

I’m now a couple of hundred points ahead (see below) on the sterling trade and have additional profits running intraday.

 Two longer term positions on GBP/AUD.  Hoping for a nice retracement on the trade.
Two longer term positions on GBP/AUD.  Hoping for a nice retracement on the trade.

These end of day positions were assembled on the basis of the daily and weekly charts (see below).

Here is my reading of the charts (which I will also put into a video format – as verbal commentary is much easier to understand at times).

We have a WEEKLY Micro swarm with a target of 1.8442 (highlighted in orange).  Notice how for three weeks this has held the advance.  Now that doesn’t mean it will hold it again, but it does give me a high probability that we will at least re-trace a little of such a huge move, and if it goes further … I will be on it because I will have positions assembled.

As an aside …. the 5 week high is 1.8475 so as per the rules of micro swarms we are pretty close to predicting the high, 2 weeks before we hit it (and the number has held for 4 weeks).

Now it gets interesting. 

We are potentially going to close back inside the swarm with a target (and microswarm support) of 1.8130 (above the purple dot).  That would give me several hundred points profit, but that’s a major IF now. 

We are only on Wednesday so the weekly candle won’t finish for 2 1/2 days …. a long time.

The daily chart (see below) is quite brutal for end of day trading at the moment.  In both directions.  Ugly if you want to be short, and not so rosy to be long.  19 days of tight range.  The big 2nd swarm sitting above us, but a rising 1st swarm pushing us up.

Now we need to see a nice confirmed close below microswarm support at 1.8335 (orange) to give us hope of heading for 1.8150ish (marked in red).  Plus a close outside the swarm would add to the pressure for the pound to give up some of its gains.

As we approach 1.8150 though, we have a lot of microswarms offering support, before we can head off towards our deeper target of 1.8012 (blue). 

I’d love to hold my daily/weekly shorts right the way down to 1.8050 and work around the ride by popping in and out for 15m and hourly chart based trades.  For now, though I am 250 points up as we speak on the longer term trades, and have closed out on over 100 on the intraday trades today. 

On a chart basis the pound looks to be right at the outer edge of expectations at the moment.  But also remember this is April  For 14 years the strongest month for Sterling, with it closing higher in April for every year since 2004 against all major currencies.  

And please, always remember, trading isn’t easy money.  Ignore the BS artists out there that claim it is.  We see people every day that have spent a lot of money on BS products.  Don’t get sucked in.  Learn to trade properly.  

But once you learn how to read the charts …. you will realise we have a massive edge with EnigmaSignal.  Dedicate some time to attending the regular training meetings and you will likely learn to read the charts with up to 80% trade success within a short period of time on any timeframe.  Learn to be right first.  Profit is the outcome.