At the time of writing, GBP/AUD is the biggest mover today, down -151 pips or -0.87%. Aussie is clearly boosted by return of risk appetite on US-China trade truce. Meanwhile, focus has now turned back to Brexit worries. It’s still generally pessimistic on the chance of getting Brexit bill through the parliamentary vote on December 11.
The development in GBP/AUD is so far pretty much in line with the bearish outlook as described in a prior quick note. Break of 1.7282 support today add to the case that 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, on bearish divergence condition in weekly MACD.
Near term outlook will now stay bearish as long as 1.7814 resistance holds, even in case of strong recovery. Next downside target is 61.8% retracement of 1.5626 to 1.8726 at 1.6810. Sustained break there will pave the way to retest 1.5626 low in medium term.
