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GBPAUD a Head and Shoulders under construction

GBPAUD Daily – bearish divergence

GBPAUD – the pair has been moving quite dynamically since the beginning of August. Last week, the maximum of this year was set at 1,8725. This week opened with a downward gap, which was closed on Tuesday. On the Daily chart, the MACD indicator creates divergence with the price.

GBPAUD H4 – a H&S under construction

If we look at the H4 chart, we can notice the characteristic shape of the emerging Head and Shoulders formation. It is still too early to open a sell order, because the formation only hypothetically predicts declines and is not confirmed until the neck line is broken (blue dotted). However, it is worth adding a pair to the “observed” and in the case of a confirmed breaking the neck line, consider opening a short position, the potential range of falls is about 350p. Each movement in the opposite direction and overcoming the level of the right arm 1.8560 will negate the bearish scenario.

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