GBPAUD Price Action Analysis – 29th August 2018
GBPAUD had a consolidation on the H4 chart. Today’s last two H4 candles were held by a Horizontal Support line. In fact, that level is a Double Bottom Support line. Moreover, there is an up trending Trend line Support level just where the pair produced an H4 Doji candle. The current H4 candle’s first H1 candle has been extremely bullish. This means that the pair might head towards the North by offering us a long entry later today. Let us have a look at the H4 GBPAUD chart.
As we see that the level of 1.75035 is a dynamic Support level. Now to have a clear bullish trend, we have to wait for a breakout at the level of 1.75865. If this current H4 candle makes the breakout there, then an H1 bullish candle closing above that H4 candle’s close would be the signal candle to go long on the pair today. Let us have a look at the summary of the trade…
- Entry- H1 Bullish candle after an H4 breakout at 1.75865
- Stop loss- Below 1.75035
- Take profit- 1.77900
Many of us might not know what Dynamic Support is. When a price gets held by a Horizontal line as well as by an up trending Trend line that is called Dynamic Support. It is vice versa for Dynamic Resistance. Dynamic Support/Resistance is one of the most important factors in any financial market. Risk and reward ratio and Winning ratio both are excellent when an entry is taken from a Dynamic Support/Resistance level.
- Validity: 72 hours
- Whenever possible, move the stop loss to the entry price and whenever you want, you can take profit anytime as long as you feel comfortable
At the moment, the H4 chart does not show a clear trend. It made a Bearish move, and then went for a retracement. If the price makes a breakout at the last lower low today, then we would get a clear Bearish trend on the H4 chart. This means this would be an opportunity to ride early on the trade. Experienced traders usually make most of it by taking out partial profit and they let rest of the trade run as long as they can. We might as well try and do that to maximize our profit. There is a saying “Cut our losses short and let your profit run.”
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