Dear Traders,
The GBP/AUD is ranging at very interesting levels. It looks almost ready for a strong bearish turn.
This analysis will examine the GBP/AUD wave structure.
The GBP/AUD is very close to completeing a long-term correction. The charts below show the longer-term complex zigzag structure since 2016, which is in it final stages now. Wave a of Z culminated in an expanding diagonal on Mar 28. Price has been moving in corrective 3-wave swings since then, which strongly suggests that we are still within b (blue) of Z (pink). Price action since the high fits best into a flat pattern, which should now be producing a bearish impulse that ends between 105% to 165% of wave a (grey).
Once this bearish swing is done, another bullish motive wave (impulse or diagonal) should be required into a new high in order to fully complete the long-term correction. 1.8640 – 1.87 is a potential end zone for such a high since it corresponds to fib extensions of the previous corrective swings.
Afterwards, the GBP should experience a strong sell-off that could make it fall over 1000 pips eventually. Keep a close eye on price over the next trading days and weeks and wait for bounce reactions in the key zones mentioned above.
All the best along your trading journey.
Hubert
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