• Home
  • Pro
  • Partners
  • Help and support
  • English
  • 简体中文
  • 繁体中文
  • ไทย
  • Tiếng Việt
  • Español
  • Português
  • لغة عربية
Pepperstone logo
Pepperstone logo
  • Ways to trade
    • Premium clients

      Exclusive benefits for high-volume traders

    • Trading accounts
    • Professional
    • Active trader program
    • Refer a friend
    • Trading hours
    • 24-hour trading
    • Maintenance
    • Risk management
    • Pepperstone pricing
  • Markets
    • Shares CFDs
    • ETF CFDs
    • Index CFDs
    • Currency Index CFD
    • Cryptocurrency CFDs
    • Dividends for index CFDs
    • Dividends for share CFDs
    • CFD forwards
  • Trading platforms
    • TradingView

      Trade through supercharts with great pricing

    • The Pepperstone platform
    • MetaTrader 4
    • CopyTrading
    • cTrader
    • Trading tools
  • Market analysis
    • Navigating markets

      Latest news and analysis from our experts

    • The Daily Fix

      Your regular round-up of key events

    • Meet the analysts

      Our global team giving your trading the edge

  • About us
    • Who we are
    • Company news
    • Company awards
    • Protecting clients online
    • Premium clients

      Exclusive benefits for high-volume traders

    • Trading accounts
    • Professional
    • Active trader program
    • Refer a friend
    • Trading hours
    • 24-hour trading
    • Maintenance
    • Risk management
    • Pepperstone pricing
    • Shares CFDs
    • ETF CFDs
    • Index CFDs
    • Currency Index CFD
    • Cryptocurrency CFDs
    • Dividends for index CFDs
    • Dividends for share CFDs
    • CFD forwards
    • TradingView

      Trade through supercharts with great pricing

    • The Pepperstone platform
    • MetaTrader 4
    • CopyTrading
    • cTrader
    • Trading tools
    • Navigating markets

      Latest news and analysis from our experts

    • The Daily Fix

      Your regular round-up of key events

    • Meet the analysts

      Our global team giving your trading the edge

    • Who we are
    • Company news
    • Company awards
    • Protecting clients online

Analysis

GBP
AUD

GBPAUD - the pair that is truly coming home

Chris Weston
Chris Weston
Head of Research
Jul 15, 2021
Share
The trade of the day for me in FX markets is long GBPAUD

I know a lot of readers trade 1hr or lower timeframes and many even scalps off 5-minute charts. However, for the higher time framers (like me) who love to see not just movement, but price breaking to new highs without duress, this is a pair that has come up on both my momo matrix but also printed a bullish outside day. I’ll digress even further and throw a weekly to you and while few trades using weekly charts, we can take a step back and really devour the structure and feel of the flow – which is all we can do as FX traders, as we really are trying to profit from a hodgepodge of various capital flows, all doing different things.

What’s hot and what’s not matrix – I want to see a confluence of the three variables.

16_07_2021_D1.png

How do you create an edge when money is moving for different investment purposes, the relative attractiveness of a country changes day-to-day, hedging flow, export demand and reserve management? Yup, it’s hard, but that’s what we do and this to me is why CFDs are best traded by aligning and buying when price exudes strength, and therefore following the flow of capital or selling with weakness. Any timeframe that offers context is small but vital intel. Momentum is often our best friend.

Of course, the real trick to trading is not necessarily the getting into a trade, although that helps obviously, but the average become good through the assessment of how much risk to take on and correct position sizing. This is a function of volatility and movement – the greater the movement or implied movement, the wider the stop, the lower the position size.

Managing an open position is where most retail traders lose out – “we’re managers of losing trades”, I hear a lot. For me taking a loss is actually quite straightforward, letting the trade run is far harder especially when trading off a 4hr or daily timeframe. Holding GBPAUD for 1.8900 can be troublesome when trading discretionary, as we consistently need to understand the signal from the noise and know when to hold and when to fold – this is the real art to trading. Knowing how to extract the most out of a profitable trade.

Anyhow, the AUD and NZD look weak, which was partly why my preference was to trade NZD outperformance vs the AUD and not the USD or the JPY. In fact, if we’ve seen a bullish outside day on GBPAUD and we’ve seen a bearish outside day on AUDUSD – Flip to the 4-hour and a break of 0.7420 and its Goodnight Irene – for now price is holding on, but if this gives way then the AUD will be taken down universally. AUDJPY is always a good proxy or risk, as is USDKRW, and AUDJPY is weak.

AUDUSD 4HR

16_07_2021_D2.png

(Source: Tradingview)

The unrelenting bid in the USD bond market remains the dominant question in macro and clearly the weakness is spilling over into other markets – the US 10yr now pushing 1.30%. In Japan, the 10yr JGB pushed to 18bp on 26 February and is now eyeing a move negative for the first time since 21 Dec – most people I speak to in the bond scene say yields are mispriced and this period of worry on economics will abate and yields will climb higher. It's yet to happen though and while many want to get short, no one is prepared to trade it with any conviction.

Certainly, USDJPY has been affected by the move in yields, but Gold remains supported and for those who didn’t watch my Gold weekly video the target, not that I will hold blindly if the price looks vulnerable, is 1850/53. Crude lower by 2% is probably not helping sentiment and the tape of crude looks weak, with price closing in areas where last week the buyers supported with gusto (green arrows). Crypto also remains weak and dangerously close to the range lows and finds friends hard to come by – Bitcoin especially needs monitoring and while the buyers have supported 31,110 if this goes then this period of sideways chop and relative calm may give way to a period of trend and higher vol.

Watch and monitor exposures as we head into the weekend.

Most read

1

The disinflationary message seen in commodities and rates markets

2

Will the BOJ be the last dovish domino to fall?

3

Trader thoughts - the conflicting forces dictating EURUSD flow

Ready to trade?

It's quick and easy to get started. Apply in minutes with our simple application process.

Get startedSubscribe to The Daily Fix

The material provided here has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Whilst it is not subject to any prohibition on dealing ahead of the dissemination of investment research we will not seek to take any advantage before providing it to our clients. Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.

Other sites

  • The Trade Off
  • Partners
  • Group
  • Careers

Ways to trade

  • Pricing
  • Trading accounts
  • Pro
  • Active Trader program
  • Refer a friend
  • Trading hours

Platforms

  • Trading Platforms
  • Trading tools

Markets & Symbols

  • Forex
  • Shares
  • ETFs
  • Indices
  • Commodities
  • Currency indices
  • Cryptocurrencies
  • CFD Forwards

Analysis

  • Navigating Markets
  • The Daily Fix
  • Meet the analysts

Learn to Trade

  • Trading guides
  • Videos
  • Webinars
Pepperstone logo
support@pepperstone.com
1786 628 1209
#1 Pineapple House,
Old Fort Bay, Nassau,
New Providence, The Bahamas
  • Legal documents
  • Privacy policy
  • Website terms and conditions
  • Cookie policy
  • Sitemap

© 2025 Pepperstone Markets Limited | Company registration number 177174 B | SIA-F217

Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.

81.1% of retail investor accounts lose money when trading CFDs with this provider.

You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

You don't own or have rights in the underlying assets. Past performance is no indication of future performance and tax laws are subject to change. The information on this website is general in nature and doesn't take into account your or your client's personal objectives, financial circumstances, or needs. Please read our RDN and other legal documents and ensure you fully understand the risks before you make any trading decisions. We encourage you to seek independent advice.

Pepperstone Markets Limited is located at

#1 Pineapple House, Old Fort Bay, Nassau, New Providence, The Bahamas

and is licensed and regulated by The Securities Commission of The Bahamas,( SIA-F217).

The information on this site and the products and services offered are not intended for distribution to any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.