The British pound and the Australian dollar (GBP/AUD) pair is flashing a classic technical setup for short-term traders. On the 1-hour timeframes, GBP/AUD recently completed a deep bearish crab harmonic pattern right at the key resistance zone between 2.03 and 2.035, which has acted as a major roadblock for bulls over the past several weeks.
Price reacted directly off this zone, showing limited momentum to push higher and instead moving into a period of consolidation just beneath resistance. The completion of the bearish deep crab pattern at this very level intensifies the odds that sellers will dominate, with prior attempts to break through being sharply rejected.
Given these signals, shorting GBP/AUD close to resistance aligns with both the harmonic pattern and prevailing price action.
The trade plan is straightforward: Look for entry in the 2.03–2.035 range, use a stop loss just above resistance at 2.045, and target a pullback to 2.02 for the first take profit and as low as 2.00 for the second target. With a tight stop and two realistic take-profit levels, the risk/reward for this trade stands at a favorable level of 2.84.
This setup is further reinforced by recent GBP softness on the back of tepid UK data and a relatively stable outlook for the Australian dollar.
Suggested Setup
- Entry: 2.03–2.035
- Stop Loss: 2.045
- Take Profit 1: 2.02
- Take Profit 2: 2.00
Read More: Nasdaq 100 Confirms Bearish Deep Crab Setup — Analysis
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