As you can see in the 4 hour chart below , the currency pair GBPAUD was in a downward trend. For nearly a month the price moved in a range of impulse done while flash crash on October 7th.
During the downward movement formed a clear resistance level (1.6100), to which the price returned first after creating formation of the left arm, then head and again the right shoulder. This level was the line of the neck of inverted head and shoulders formation.
Yesterday line of the neck was broken, which confirmed the formation reversed H&S. The range of this formation is measured from the neckline to the top of the head and is about 320 pips. Therefore, the movement measured by what can be expected as a result of this bullish breakout should direct the price of GBPAUD to the level of 1.6440.
Traders can wait for a correction of last upward movement that occurred as a result of the breaking out and take for consideration long positions after its completion. This correction can also get back to the line of the neck to test it from the top, which should give a good opportunity for enter the market.
