FOREX Chart Of The Day: Trading GBPAUD On a Lower Timeframe
Hi guys, and welcome to today’s Blueberry Markets video update with me, John Kibbler, Head Currency Analyst.
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In this video, I’m going to go through GBP/AUD. I like buying opportunities here. I’m going to explain why I like the buying opportunities here and how two different approaches you could have taken to execute on this position.
So, I’ve actually taken two positions on this: one was the break above the daily highs, and the second trade is a 15-minute timeframe intraday trade. I’ll show you both and then go from there.
So, here’s our position at the end of the day. There’s a break above this high, here. And we have a stop-loss order below this low, targeting that 1.87 area. So, that is the daily timeframe, which is pretty much triggered now.
How do I want to be involved in this market? Well, I like to use strength instead of weakness analysis. So, you can see, here, my strength from weakness table, but it says that the GB Pound is gaining value and plus five, plus one on the week while the AU Dollar is losing value.
What that means is that GB Pound is likely to be stronger than the AU Dollar this week, and the way we can tell that on our chart is by looking at the trend.
Is the market making higher highs? Well, yes, it is because we made this formation, here, and then we broke out and formed a new high. So technically, we have a higher high. So, what I’m looking for is for the price to come back into this level and then move in line with that potential trend. We took a position on this off of this candlestick last week. Unfortunately, we got taken out. But, the market looks to be setting up again and I do like the opportunity to buy GBP/AUD here.
Essentially, the market has come back, retest these structure highs. So what I like to do then is dive down into the four-hour timeframe, or what I should say is I like to look at those daily closes – nice bullish closes, right. So, I’m expecting that daily timeframe to push to the upside. My next step is to go to the four-hour, and I want the trend to match up with my daily timeframe. You’ve heard me speak about this before but the trend is our friend. I really like to follow the four-hour timeframe and we can see, here, that the market double bottoms.
This morning, I looked for the market to basically pull back and retest this structure in here. So, I place a rectangle here as a support level between the high and the bodies of the candlesticks, just through there. What I do then, is wait for the price to come back to this level and then execute my order on a 15-minute timeframe, and how I do that is by looking for another change in cycle. So, what I’m essentially doing is stacking up the trend.
So, the daily is in an uptrend. The four-hour is in an uptrend, and the 15-minute is now starting to an uptrend.
What I like to do when the price comes back into my level of support is to look for those changes in the cycle and we can see the markets start bouncing around, bouncing around, and then boom – breaks this high in here. I look for the long position, there. What that looks like is a long order, here, stop losses five pips below the low. So, it’s around about 30-34 pips stop-loss, target 2R. Always look for those two to one of the trading opportunities on lower timeframe moves. This is the composition on the 15-minute timeframe, a really simple way to enter a market, and all you’re doing is stacking up the trend. So, just to go over that quickly again, the daily timeframe is making higher highs.
Why do I want to be in this market in the first place? Well, the currency strength and weakness table are suggesting that I’ll buy this market, the daily timeframe is bullish, it formed a new high, then retested the previous high structure.
The next step is the four-hour in an uptrend. While it has now – because it’s changed in trend – it’s broken this double pattern high, I want to see the market come back into this level and for the 15-minute timeframe to agree with that. The 15-minute came into the level then agreed with it. But the market, it stops below the lows, target to our return. So, there’s a couple of different ways you could have traded GBP/AUD there, but GBP/AUD trend to the upside looks good.
I still really like the weekly timeframe on this. The fact is, it was in that oversold condition. So, we’re expecting some further upside on this. We’re looking for that 1.86 area to come into play on this. You can see that, just through here, it’s a really big level, through there, on GBP/AUD. and I’m expecting for that to continue.
The GB Pound is the strongest currency last week as well – really adding to some buying of the GB Pound going into this week. So, keep an eye on that. I do like this market a lot.
The other option you can wait for, if you’re not involved with this trade or this market, is to wait for that trend to continue.
So, now we’re back at these highs. If the market breaks out, pulls back, and go to that 15-minute timeframe, look for that change in the cycle and look to buy the market in line with our trend.
Thanks for watching this video update and I’ll catch you in the next one.
We hope our forex chart of the day analysis helps you in your trades. Practice trading the GBP/AUD pair with free $50,000 funding when you sign up for a free demo account at Blueberry Markets.