Trade Leader Or Kahana analyzes recent developments in the GBP/AUD
Last night (on 22-04-14) GBPAUD created a bullish pattern in the weekly CCI, a weekly Zero line reject (ZLR). I am not using the standard CCI but rather the Woodie's CCI. The blue CCI (turbo-6) reached to the zero line while the black CCI (50) was and still is in the 40 region, both in a V shape.
You can see all the recent ZLRs have led to strong gains in this pair, between hundreds to thousands of pips.
A weekly ZLR does not mean one can execute a long trade in GBPAUD immediately!
In the daily CCI there is still a potential for a bearish ZLR. Before entering the bullish uptrend, make sure this potential ZLR is invalidated!
I would analyze the hourly chart and search for a ZLR after the opening of the first green bar or the following green bars in order to perfect my entry.
There are a couple of things you must note before taking the trade. The first thing is the negative swap. Longing GBP/AUD incurs a relatively high negative interest so it may be wise to target 30-40 pips (depending on the hourly range) as intraday take profits and to continue buying on dips if intraday technical patterns are confirmed, 1hr, 4hr and/or Daily chart should be used. The second is not less important than the first. When looking at the monthly chart you will see that this pair already gained approximately 5,000 pips from the bottom. Bear this in mind! I won't expect hundreds to thousands of pips as seen in the latest ZLRs. Taking this ZLR I would expect a smaller movement of about tens to hundred pips.