GBP/AUD trade idea: How to play the short term trend accelerating higher

Part 1) Introduction

Volatility Markets suggests trend-inspired trades that capitalize on market trends.

In the short term GBPAUD has been accelerating higher. In the long term GBPAUD has been accelerating higher. With the short term trend being the stronger of the two, we propose a long trade idea with a one week time horizon.

Part 2) Trade idea details

Buy £ 69,702 GBP , or 0.7 lots of GBPAUD, take profit at £ 1.7957 level with 25.0% odds for a £ 1,717 GBP gain, stop out at £ 1.7274 with 50.0% odds for a £ 1,000 GBP loss through 1w time horizon.

Part 3) GBP/AUD trend analysis

GBP/AUD last price was £ 1.752511 . The short term trend accelerating higher is stronger than the long term trend accelerating higher. This trade goes long when the last change was higher and accelerating .

Part 4) GBP/AUD value analysis

Over the past 20 days, the GBPAUD price increased 10 days and decreased 10 days. For every up day, there were 1.0 down days. The average return on days where the price increased is 0.8108% The average return on days where the price decreased is -0.4964% Over the past 20 Days, the price has increased by 3.09% percent. Over the past 20 days, the average return per day has been 0.1545% percent.

Part 5) GBP/AUD worst/best case scenario analysis

Within 1 week, our worst case scenario where we are 95% certain that this level won't trade for GBPAUD, is £ 1.678158 , and the best case scenario overnight is £ 1.826864 . levels outside of this range are unlikely, but still possible, to trade. We are 50% confident that £ 1.7274 could trade and that £ 1.7957 could trade. These levels are within statistical probability.

Key takeaways

• Price today £ 1.752511.

• Over the past 20 days, the GBPAUD price increased 10 days and decreased 10 Days.

• For every up day, there were 1.0 down days.

• The average return on days where the price increased is 0.8108%.

• The average return on days where the price decreased is -0.4964%.

• Over the past 20 Days, the price has increased by 3.09% percent.

• Over the past 20 days, the average return per day has been 0.1545% percent.

• Over the past 20 days, The price has on average been accelerating: 8.9916 pips per day higher.

• Over the last session, the price increased by 195.83 pips.

• Over the last session, the price increased by 1.1174 %.

• Over the last session, the price accelerated by 118.14 pips.