GBP/AUD Could Head for 1.9053 After Bearish Engulfing

The Great Britain pound versus the Australian dollar currency pair seems to lack the power to drive prices higher. Is this actually true or the bulls are just waiting for the right moment?

Long-term perspective
The ascending movement that started after 1.7634 was confirmed as support managed to conquer every level with relative ease and, thus, was able to extend until the high of 1.9752.
Even if the bulls seem to be at the controls, the fact that the retracement from the 1.9752 took the shape of a bearish engulfing — as February 3 covers January 31 — makes the bears think that their moment is about to arrive.
Even more, in the aftermath of the pattern, the price departed from the 1.9470 level to quite an extent.
All these, tied together, just might offer the context in which the bulls — for the time being — do not have the main share of the market. As a result, the bears are the ones that are expected to play their part.
Of course, one natural expectation would be for the bulls to try and reconquer 1.9470. So, it is important to wait for the outcome of the moment when the price will revisit this level, as a failure to confirm is as support would pave the way to 1.9053 and also complete the second top of a double top pattern. On the other hand, if the bulls do win, then an extension that lasts until the previous peak — 1.9752 — is in the cards.
But if the price does not get at all the chance to visit the level of 1.9470, then the message that a very high bearish pressure is unfolding would be very clear, the result of this being 1.9053 receiving the visit.

Short-term perspective
The appreciation ended at 1.9752 and was followed by a strong fall, one that got the price under 1.9346.
If the price manages to establish itself above 1.9346, then 1.9487 is the main target, as it could be confirmed as resistance and facilitate the formation of the aforementioned double top.
But if 1.9346 is confirmed as resistance or falsely pierced, with a relatively quick retracement of the price beneath it, then 1.9047 represents the main bearish target.

Levels to keep an eye on:

D1: 1.9470 1.9053 and the peak of 1.9752
H4: 1.9346 1.9487 1.9047


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Original from: www.earnforex.com