• As anticipated in our recent posts, we've already seen GBPAUD has evidenced 438 pips of fluctuation on a single trading day. As we spotted out a clear sell call on this pair 1^st time ever since February 2014. You can observe from the technical charts how the prices reacted soon after the formation of Gravestone doji and long legged doji and shooting star on daily chart. Now shift focus on weekly hints (see weekly chart).
  
  
• Rationale: Why we are calling this as clear sell is that we often urge technical should not studied in an isolation as a particular signal should be precisely justified and substantiated in enough confirmation with other indicators, trend or whatsoever (please refer above weekly and daily charts).
  
  
• While we were designing long term hedging framework 14 week RSI was used with an objective to track price momentum over medium to long term perspectives. As shown in the diagram, when strength index curve approached 80 levels (i.e. overbought territory) a steep divergence is evidenced around 2.1467 levels and that was the time when gravestone, long legged doji and shooting star formed. Divergence on weekly often takes many weeks to correct these price discrepancies. For a swing trader it is all too easy to be carried away by a market that apparently knows no bounds.
  
  
• Slow stochastic on the other hand also evidences overbought scene as %D line crossover above 80 levels which is again overbought zone. The same was confirmed with daily charts as both leading oscillators evidence the same situation and substantiated better with some bearish candles such as Doji and shooting star patterns at 2.1376, 2.1378 and 2.1387 respectively. Currently on weekly charts, RSI is trending at 76.1968, %D line at 94.1376 while %K line at 90.4710 levels.