For now, GBP/AUD is trading as the top mover for today. Sterling is weighed down by Brexit impasse, retail sales miss as well as yesterday’s CPI miss. On other hand, Australian Dollar is supported by rally in iron ore prices. Here is a quick near term view on the cross.
Technically, we believed that a short term top is formed at 1.8726, with mild bearish divergence condition in daily MACD. Also, it’s close to 61.8% projection of 1.6161 to 1.8507 from 1.7282 at 1.8732. Hence, there is prospect of deeper pull back.
For the near term, GBP/AUD should be targeting 38.2% retracement of 1.7282 to 1.8726 at 1.8174 and possibly further to 55 day EMA (now at 1.8118). But there is no clear sign of trend reversal yet. So downside might be contained there. This will be the preferred case as long as 1.8563 minor resistance holds, even in case of recovery.
