By: Mike Kulej
One of the strongest and the longest lasting trends in currencies during the past few years was has been in the British Pound-Australian Dollar. This cross fell from about 2.7000 in 2008 to the recent low of 1.5150, a staggering drop almost 12,000 pips.
During this period, the GBP-AUD made only few attempts to reverse the bearish trend and all of them met with failure. Every time the price made a new low, which recently became new all time lows. Currently yet another possible reversal is under way.
What's Different Now?
This time the chart looks a little different than during any previous such events. The price assumed a very distinctive v-shape, straddled on both sides with well-defined channels, at almost the same levels. Combined, these elements give this potential bottom a symmetrical appearance. Symmetrical price patterns have a little higher probability of being successful.
In case of this daily chart of the GBP-AUD, the success hinges on the price making a breakout above 1.6400. If that happens, this bottom could have a staying power, providing a reversal to a major trend. The current channel has been about two months in the making so it should not last much longer.