Wednesday, May 13, 2020

Bullish Divergence On GBPAUD

Marco Tosoni

FХ Strategist & Financial Commentator

After the wide trading range climax built on last March between 1.99 and 2.07 area, during the month of April this pair has showed a strong bearish rally which brought the quotes back towards the previous bottoms of 2020 nearby 1.89 area with a final collapse characterized by 7 bearish days in a row.

During yesterday’s session, a doji candle has formed with a closure around 1.8940 area nearby last week’s bottom and a first failed rising swing.

Looking at the RSI indicator we can detect a perfect bullish divergence, that should represent a reliable anticipation of a further bounce of the Pound around an important support area, at least with a short-term outlook. The Average True Range continues to decline as we have seen throughout the month of April and is currently working around it’s the 2019 levels.

The bullish setup would be activated in case of a breakout of yesterday’s top at 1.9150, with a stop loss to place at 1.8850 below yesterday’s bottom. The target price could be expected around 1.9450 area nearby this month tops.

As always I recommend to trade carefully and to plan at best every move. Don’t forget to subscribe to NBHM YouTube Channel to stay up to date with the financial markets! Have a good trading and see you for the next video.

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