GBP/AUD: Retracement expected before heading towards 1.7500
Good afternoon Traders and welcome back to EverythingFX.
The Great British Pound is currently trading at 1.77148 against the Australian Dollar in today's London session.
What a great rally it's been falling 285 PIPs from a rejection of 1.80000. Looking on a weekly timeframe we had a fairly bearish closure last week and have since seen that follow through this week. Dropping to the daily timeframe we have been sliding with little to no pullback what so ever. We have managed to sustain a daily break and closure above the 1.77500.
Dropping to a 4-hour timeframe we can see the price has found a minor level of support in and around 1.76500 and is currently pulling back. I do favour a pop up to re-test a minor level of support which was broken and now turned into resistance in and around 1.78500 before creating a further leg to the downside. Amid all the Brexit uncertainty I wouldn't be surprised if we come to revisit 1.70000 in the next 3-6 months. What would invalidate this bias is a change in the stance with our current Brexit deal and a technical daily break of 1.80000.
Fundamentally we have seen the Aussie Dollar gain strength at the start of the week assisting in pushing this pair lower! With the Bank of England starting to prepare themselves for a hard Brexit we have seen a double whammy in pushing this pair lower. Furthermore, we can see that Brexit is ultimately the driving force for the Pound at the moment. Drop a comment below of whether you think we going to leave the EU with a deal or not and why? Stay tuned to our market news section and social media for more updates.