GBP/AUD is starting to show some signs of recovery by creating higher peaks and higher lows on the 4-hour chart. The pair is currently above the downwards moving trendline, taken from the highs of the 27th of April. Also, GBP/AUD has completed a 23.6% Fibonacci retracement and now is just slightly above that level. Thus, in our view, this makes the short-term picture somewhat positive.
Yesterday’s burst to the upside brought some hope for the bulls that there could be a good chance for a continuation to the upside. GBP/AUD found strong resistance at the 1.7670 level and retreated somewhat, but if the pair reverses back up and breaks that level, then we could see a move towards the 1.7735, which was the highest point last week. Certainly, if that level is not able to withhold the rate from rising, then this could open the path towards the next key area of resistance at the 1.7800 mark, which coincides with the 38.2% Fibonacci retracement.
Alternatively, a strong move down to the 1.7600 level and eventually a break of it, could indicate upcoming weakness in GBP/AUD. The next potential area for a test could be the 1.7530 mark, a break of which could open the path towards the 1.7470 area, or even slightly lower to the 1.7390 zone, which up until now, it has been the June’s lowest point.
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