GBP/AUD 4H Chart: Channel Down

Source: Dukascopy Bank SA
© Dukascopy Bank SA
Unlike in GBP/CAD, there are good reasons why we the Sterling may not re-visit April's low versus the Australian Dollar any time soon. The main argument against a decline in GBP/AUD is a major trend-line at 1.9370. It was in fact broken last month, but considering the important role it had played for seven months starting from last year's August, underestimating its potential effect on the rate's behavior would be unreasonable. Accordingly, we are currently neutral on the pair, waiting which of the key levels is going to be violated first—either the trend-line at 1.9370 or the upper bound of the emerging downward-sloping channel, and this in turn is likely to define medium-term direction of the price.
© Dukascopy Bank SA
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