The GBP/AUD pair tried to break higher during the session on Monday, but found far too much in the way of resistance above the 1.80 level. The area would have also been a bit difficult to overcome given the fact that we had most of Europe away for Easter Monday, so liquidity would have been an issue as well. The 1.80 level is obviously a large, round, psychologically significant number, so a lot of stop loss orders should be found in the region. This should bring in continuation in an already negative market. The British pound continued to do fairly well against the US dollar, but the Aussie has been a different animal altogether.
The candle that formed on Monday was a shooting star, and indicative of selling pressure. I like this trade for a move down to the 1.78 level, and possibly lower. I think the market will have to make a fresh new low in order to make it a “sell-and-hold” proposition, but the chart certainly isn’t telling me that it can’t happen. Pay attention to gold as well, as the Aussie strength normally has a positive correlation to it. Anyway, I’ll be selling soon….
