GBP AUD - Correction retracement over?
Hello Traders and Analysts,
A Note before reading - this is a forecast analysis - based upon our trading strategy. This is tagged Neutral for the short term. Long term, bullish, due to purchasing further increments upon imbalances.
Please do not take this as face value and conduct the relevant investment strategy to successfully trade the probabilities.
Note:
To see more information - review the linked ideas for more
Master Key for zones
*Blue = Monthly
*Purple = weekly
*Red = 4 Days
*Yellow = 16 Hours
*Orange = Daily
*Dark Green = 8 Hour
*Grey = 4hour
*Pink = 1 hour
Review the full analysis below;
or below
Original analysis process.
Below is an explanation of the imbalance/inefficiency zones based upon the original analysis view.
1. Zone 1: - 1.72 - 1.75
we will be looking at a test of the order block, movement away to keep shorts flowing to keep the imbalance moving towards the zone of a 1.72 redistribution, liquidity to show bears further short options before the lows.
From here we will expect a spring and a test of said springs.
A rejection will occur and then see accumulation phase of price hitting the target on the AUD USD with bullish Aussie.
2. Exactly the same but making further gains moving down to 1.67-1.60 which will be the development.
We volume will be a key indicator here to see the set up of the buy/sell swaps.
Moving to now...
Monthly imbalances:
Pretty simple breakdown from a monthly perspective, where GBP maxed out in March 2020 and began the sellers imbalance to reach lows of 1.742 as previously stated above.
From a buying retrace imbalance - the targets are set at the 1.87 mark and 1.93 the next target. From a positional buy into 2022 if the 50% monthly Fibonacci retracement permits the target and holds above, then extension of 2.0X will be looked towards.
Weekly Inverse Fibonacci
1. this shows the inverse Fibonacci upon the previous imbalance whereby price has created a pivot structure on the weekly chart at 1.9158, price created a low formation to create a reversion of "0" at the base of 1.85, GBP AUD is very good at correcting to 61.8 or 70.5% using Fibonacci, personally the structure of this pair tends to ignore the 50% pivot structure as the pair is open to larger engulfing moves. [Do a back test to understand the use of Fibonacci and Imbalance zones to plot points to improve marking up charts].
-0.618% Pivot imbalance reversal
Overall this extension target was important to await the initial move, creating the High [1] and low [0] to allow the corrective imbalance to imbalance structure to navigate itself. Those who can form a basis understanding of the imbalance zone at [0] will be able to place shorter term but maintain long opportunities as the overall monthly shows a buying imbalance probability in higher favour than sellers.
Monthly higher highs
The two highlights on this chart has been purposely left to show the 0.236 and 0.382 retracement zones where highly probable bullish moves will occur.
Looking left the white eclipse which is circling the bearish candle, note how the second highlight retraces perfectly to the body of the wick, closes out and nets - this is our net imbalance whereby price has closed out in favour of the bullish manoeuvre which will now show probability over >50% in favour of the bulls.
The second formation of this zone forming an imbalance is for two reasons which will be explained. Revert to the below chart to see why this 0.236 is important.
I. The imbalance candle has netted off and also in combination with higher low formation upon the monthly shows the buying opportunities to now test "0" and continue the trend to the up and right.
The netting is important here as the body of the bearish candle forming the imbalance at
II. The formation of the weekly and monthly inverse Fibonacci and Extension Fibonacci indicate a clear pivotal reactive zone where the inverse completion pattern is now overextended, and the monthly extension pattern is showing a corrective structure for a change of hands. [Figure 2]
[Figure 2]
Daily Correctional Channel
The daily correctional channel in conjunction with the weekly shows the correctional pattern of the creation and formation of the higher lows and lower highs.
When plotting the trendlines upon the swing low of the formation "0" and the correctional pullback for the continued trend of selling over the short, medium term at 61.8% - 70.5%.
The channel lines are formed in line with top wick placed at "1" and now the channel will bounce within these zones [>90%] probability.
Where the lowest low or completion has formed, the -0.618 has provided a change of hands upon a buying imbalance.
Now price looks to break the trend and resume longs at a discounted price.
The next step is to break the formation of the upper trend line, break and retests are a highly probable scenario where the zone will be testing the "0" and ultimately on a daily timeframe (once a high has formed) a retest of a pivot point be it -0.27 in this case).
Trades can be added here with confirmations for both buys and correctional sells for hedging.
AUD USD
Correlation of GBP AUD vs AUD USD
Imbalance spotting is important to note on one pair like GBP AUD, however the web behind the imbalance is just as important to keep in mind when looking for imbalance trades as pairs are called pairs for a reason.
Looking into two variables where correlation is either Perfect positive correlation +1, 0 or Perfect negative correlation -1 i in simple Lehman's terms.
AUD is coming from a monthly imbalance meanwhile GBP AUD will turn positive where price is coming from a monthly buy imbalance.
Comparing the GBP AUD to the AUD USD - using a monthly correlation grid.
The current at time of analysing is -79.7% negatively correlated. This has been due to the weak USD in play and the positive correlation against the SPX500 and the USD associated with the index. XAU is also a factor here whereby XAU a hedge against inflation and a propulsion for the Aussie to provide further additional strength.
Inverse correction pattern completed upon the weekly, but will now look to test the monthly zone where the AUD has not retested the lower imbalance of 0.70 as yet. The weekly trendline if plotted will show a formation of lower highs but at the same time forming higher low pivots, so where price will come to an apex, we will have to await the confirmation of the next move.
The DXY is pivotal
DXY to see the imbalance reverse upon the devaluation of the USD where the FED has created an abundance of credit which has financed the citizens essentially to 'stay put' in cases whereby specific industry sectors within the US are rendered 'useless' until the hospitality and entertainment, aviation can all be kick started again.
Below are the pivotal monthly imbalances on the chart which are hard to not notice. The Monthly imbalances clearly indicate where the profit targets for the DXY are as price has clearly rejected.
Use this monthly imbalance analysis to help trade in a higher time frame.
Where are now, currently using the weekly chart
Do you enjoy the setups?
*Professional analyst with 5+ years experience
*Focus on technical output not fundamentals
*Position and swing trades
*Provide updates where necessary - with new updated ideas tracking the progress.
If you like the idea, please leave a like or comment.
To all the followers, thank you for your continued support.
Thanks,
LVPA MMXXI
A Note before reading - this is a forecast analysis - based upon our trading strategy. This is tagged Neutral for the short term. Long term, bullish, due to purchasing further increments upon imbalances.
Please do not take this as face value and conduct the relevant investment strategy to successfully trade the probabilities.
Note:
To see more information - review the linked ideas for more
Master Key for zones
*Blue = Monthly
*Purple = weekly
*Red = 4 Days
*Yellow = 16 Hours
*Orange = Daily
*Dark Green = 8 Hour
*Grey = 4hour
*Pink = 1 hour
Review the full analysis below;
or below
Original analysis process.
Below is an explanation of the imbalance/inefficiency zones based upon the original analysis view.
1. Zone 1: - 1.72 - 1.75
we will be looking at a test of the order block, movement away to keep shorts flowing to keep the imbalance moving towards the zone of a 1.72 redistribution, liquidity to show bears further short options before the lows.
From here we will expect a spring and a test of said springs.
A rejection will occur and then see accumulation phase of price hitting the target on the AUD USD with bullish Aussie.
2. Exactly the same but making further gains moving down to 1.67-1.60 which will be the development.
We volume will be a key indicator here to see the set up of the buy/sell swaps.
Moving to now...
Monthly imbalances:
Pretty simple breakdown from a monthly perspective, where GBP maxed out in March 2020 and began the sellers imbalance to reach lows of 1.742 as previously stated above.
From a buying retrace imbalance - the targets are set at the 1.87 mark and 1.93 the next target. From a positional buy into 2022 if the 50% monthly Fibonacci retracement permits the target and holds above, then extension of 2.0X will be looked towards.
Weekly Inverse Fibonacci
1. this shows the inverse Fibonacci upon the previous imbalance whereby price has created a pivot structure on the weekly chart at 1.9158, price created a low formation to create a reversion of "0" at the base of 1.85, GBP AUD is very good at correcting to 61.8 or 70.5% using Fibonacci, personally the structure of this pair tends to ignore the 50% pivot structure as the pair is open to larger engulfing moves. [Do a back test to understand the use of Fibonacci and Imbalance zones to plot points to improve marking up charts].
-0.618% Pivot imbalance reversal
Overall this extension target was important to await the initial move, creating the High [1] and low [0] to allow the corrective imbalance to imbalance structure to navigate itself. Those who can form a basis understanding of the imbalance zone at [0] will be able to place shorter term but maintain long opportunities as the overall monthly shows a buying imbalance probability in higher favour than sellers.
Monthly higher highs
The two highlights on this chart has been purposely left to show the 0.236 and 0.382 retracement zones where highly probable bullish moves will occur.
Looking left the white eclipse which is circling the bearish candle, note how the second highlight retraces perfectly to the body of the wick, closes out and nets - this is our net imbalance whereby price has closed out in favour of the bullish manoeuvre which will now show probability over >50% in favour of the bulls.
The second formation of this zone forming an imbalance is for two reasons which will be explained. Revert to the below chart to see why this 0.236 is important.
I. The imbalance candle has netted off and also in combination with higher low formation upon the monthly shows the buying opportunities to now test "0" and continue the trend to the up and right.
The netting is important here as the body of the bearish candle forming the imbalance at
II. The formation of the weekly and monthly inverse Fibonacci and Extension Fibonacci indicate a clear pivotal reactive zone where the inverse completion pattern is now overextended, and the monthly extension pattern is showing a corrective structure for a change of hands. [Figure 2]
[Figure 2]
Daily Correctional Channel
The daily correctional channel in conjunction with the weekly shows the correctional pattern of the creation and formation of the higher lows and lower highs.
When plotting the trendlines upon the swing low of the formation "0" and the correctional pullback for the continued trend of selling over the short, medium term at 61.8% - 70.5%.
The channel lines are formed in line with top wick placed at "1" and now the channel will bounce within these zones [>90%] probability.
Where the lowest low or completion has formed, the -0.618 has provided a change of hands upon a buying imbalance.
Now price looks to break the trend and resume longs at a discounted price.
The next step is to break the formation of the upper trend line, break and retests are a highly probable scenario where the zone will be testing the "0" and ultimately on a daily timeframe (once a high has formed) a retest of a pivot point be it -0.27 in this case).
Trades can be added here with confirmations for both buys and correctional sells for hedging.
AUD USD
Correlation of GBP AUD vs AUD USD
Imbalance spotting is important to note on one pair like GBP AUD, however the web behind the imbalance is just as important to keep in mind when looking for imbalance trades as pairs are called pairs for a reason.
Looking into two variables where correlation is either Perfect positive correlation +1, 0 or Perfect negative correlation -1 i in simple Lehman's terms.
AUD is coming from a monthly imbalance meanwhile GBP AUD will turn positive where price is coming from a monthly buy imbalance.
Comparing the GBP AUD to the AUD USD - using a monthly correlation grid.
The current at time of analysing is -79.7% negatively correlated. This has been due to the weak USD in play and the positive correlation against the SPX500 and the USD associated with the index. XAU is also a factor here whereby XAU a hedge against inflation and a propulsion for the Aussie to provide further additional strength.
Inverse correction pattern completed upon the weekly, but will now look to test the monthly zone where the AUD has not retested the lower imbalance of 0.70 as yet. The weekly trendline if plotted will show a formation of lower highs but at the same time forming higher low pivots, so where price will come to an apex, we will have to await the confirmation of the next move.
The DXY is pivotal
DXY to see the imbalance reverse upon the devaluation of the USD where the FED has created an abundance of credit which has financed the citizens essentially to 'stay put' in cases whereby specific industry sectors within the US are rendered 'useless' until the hospitality and entertainment, aviation can all be kick started again.
Below are the pivotal monthly imbalances on the chart which are hard to not notice. The Monthly imbalances clearly indicate where the profit targets for the DXY are as price has clearly rejected.
Use this monthly imbalance analysis to help trade in a higher time frame.
Where are now, currently using the weekly chart
Do you enjoy the setups?
*Professional analyst with 5+ years experience
*Focus on technical output not fundamentals
*Position and swing trades
*Provide updates where necessary - with new updated ideas tracking the progress.
If you like the idea, please leave a like or comment.
To all the followers, thank you for your continued support.
Thanks,
LVPA MMXXI
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