The GBPAUD currency pair is currently trading within a supply zone, presenting a potential shorting opportunity for traders. Based on the technical analysis, the recommendation is to enter a short position from the identified supply zone, with the short-term target set at 1.7750 and the long-term target at 1.7420.
This supply zone is a critical area on the GBPUSD chart where the market is likely to encounter strong selling pressure, as traders who previously bought in that region may look to exit their positions, resulting in a downward price movement. By identifying this supply zone, traders can strategically enter short positions, aiming to capitalize on the anticipated price reversal.
The short-term target of 1.7750 represents a level where the market may encounter initial support and a possible consolidation or reversal. This target is based on the technical analysis of the market’s historical price action and support/resistance levels. Reaching this target would provide traders with a reasonable profit in the near term.
The long-term target of 1.7420 is a more significant level of support that the market may test if the downward momentum continues. This level is identified based on a more comprehensive analysis of the broader market trends, previous swing lows, and other technical indicators. If the market reaches this level, traders may consider taking profits or adjusting their positions accordingly.
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It is important to note that the invalid level for this trading recommendation is set at 1.8210. This means that if the price breaks above this level, the short position should be closed, as it would indicate a potential reversal or a false breakout of the supply zone. Respecting the invalid level is crucial to managing the risk associated with the trade and ensuring that losses are limited in case the market does not behave as anticipated.
When executing this trading analysis, traders should consider the broader market conditions, macroeconomic factors, and their own risk tolerance. It is also recommended to use appropriate risk management techniques, such as stop-loss orders and position sizing, to protect their capital and minimize potential losses.
In conclusion, the trading recommendation for GBPAUD suggests a short position from the identified supply zone, with short-term and long-term targets at 1.7750 and 1.7420, respectively. The invalid level for this trade is set at 1.8210. Traders should carefully analyze the market conditions, apply proper risk management strategies, and monitor the trade closely to maximize their chances of success.