GBP/AUD Freefalls with No Apparent Stops
March 16th, 2010 Posted in Technical Analysis
The GBP/AUD pair is dropping quite constantly for almost two years now. Normally, traders are advised to stay away from this pair as it is considered to be too volatile, and is even named by several analysts as an exotic pair. However, traders should not miss out on such unique opportunity.
• The chart below is the GBP/AUD 1-Week chart by ForexYard.
• The technical indicators used are the Bollinger Bands, the Slow Stochastic, the MACD/OsMA and the Relative Strength Index (RSI).
• The MACD provide a bearish cross once again, indicating that the freefall has more room to go.
• The RSI has failed to reach the 60 line, and has once again dropped into the ‘Over-Sold’ zone. This suggests that the momentum is still bearish.
• Nevertheless, the Slow Stochastic shows a bullish cross, which means that the bearish momentum might halt a bit. Yet as the last 2 years shows us, bullish crosses of the Slow Stochastic have predicted halts in the bearish trend and not bullish reversal.
• It seems that as long that the Pound continues to fall on all fronts, the largest drop will take place against the AUD.
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Tags: GBPAUD, Technical Analysis
