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TREND IN FOCUS: GBPAUD (H4)
- The GBPAUD has the strongest momentum score at the moment at +3.86, though it should be noted that the lower timeframes have seen their moving averages compress and start to turn over (m15 is neutral now).
- The miss on the 2Q’13 UK GDP report spurred GBP selling across the board; and the prior H4 candle (01:00 EDT to 05:00 EDT) formed an Inverted Hammer (bearish reversal candle).
- Price broke out of Symmetrical Triangle congestion to the upside earlier this week, putting focus on A$1.6940/50 as the topside 100% extension target (July 10 low to July 12 high, ext July 16 low).
- Near-term setbacks look to be bought; the 21-SMA at 1.6630/35 coincides with the triangle support as the first area to look long.
- A break below 1.6500/20 negates the bullish bias following the triangle breakout.
Read more: Pound Falls Despite UK Economy Meeting Expectations for +0.6% Growth
*Trend definitions: “uptrend” is defined as 8-MA>21-MA>55-MA; “downtrend” is defined as 8-MA
*Scoring methodology: there are seven time frames, ascending from m15 (15-minutes) to W1 (one-week). In ascending order, each pair is assigned a value from -7 to +7 based on the trend apparent on the specified time frame (I.E. a m15 uptrend equals +1, whereas a H1 downtrend equals -3). If neither an uptrend nor downtrend is present, the trendless timeframe receives a score of 0. These points are totaled and the average is reported on the right. The strongest uptrend would achieve a score of +4.00, while the strongest downtrend would achieve a score of -4.00.
--- Written by Christopher Vecchio, Currency Analyst
To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
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