GBP/AUD is once again a top mover today.
Sterling’s weakness is not too much of a surprise based on the lack of progress of any form in Brexit negotiation. But Australian Dollar’s resilience is rather impressive, considering that US-China trade war is ready to enter a full-blown stage any time. Nonetheless, Aussie’s strengthen is also somewhat in correlation to resilience in Chinese stocks as well as iron ore prices. So, at least, it’s explainable.
With today’s downside acceleration, focus is now, immediately, on 61.8% retracement of 1.7282 to 1.8726 at 1.7863. Based on current downside momentum, this level could be easily taken out. And that will in turn be a stronger sign of medium term trend reversal.
That is, whole “corrective” up trend from 1.5626 (2016 low) has completed at 1.8726 on after missing 50% retracement of 2.2382 to 1.5626 at 1.9004. For now, near term outlook will stay bearish as long as 1.8156 resistance holds. Sustained break of 1.7863 will turn focus to 1.7282 key support for confirming this medium term bearish case. GBP/AUD could be a very good candidate for medium term position trading.
