Good morning Forex Kings,
We have now let the markets settle down over the past couple of days. Trading in such high risk environments is extremely difficult with the large swings in the market.
Overnight Trump has announced plans for a payroll tax deduction. This is to help prevent unemployment from increasing over the coming months due to the global corona-virus outbreak.
Here in Australia the government is planning on spending 10 billion on a stimulus package with small businesses expected to receive cash payments.
GBPAUD – Weekly Charts
The break above the trend line is potentially a short squeeze. A short squeeze is where the market pushes higher to take out all of the short positions. A similar scenario happened back in 2008.
GBPAUD – Daily Charts
Bearish divergence on the RSI which is signalling a slow down in momentum. We have had a huge rejection candle during the break out on Monday.
There is potentially 100’s of pips up for grabs on the position if the markets continue to calm down. We will still need wide stop losses.
Trade Setup: SELL STOP: Entry price 1.9730, stop loss 1.9930 and take profits left to run, however we will be targeting the 1.9300 area.
Stop loss: 200 PIPs