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GBP/AUD: Technical Outlook Before the Australian Cash Rate

Published on: 03/04/2017

During the previous week the GBPAUD broke the down the price channel and made around +370 pips as profit from the breaking, but now we have a different situation and we might sell the pair this week.

Last Wednesday the European Union President received the official letter for the British government about exiting the EU, activating article 50 from the Lisbon Agreement. After this the British Pound rose against the Australian Dollar and reached 1.6456 at the end of the week.

Today the GBP/AUD has risen to touch the down trend line at 1.6511 and we saw a bearish candle on the H4 chart at a resistance area, which might push the pair to decline in the next hours. Still, we have to wait for the confirmation signal when the prices break the Moving Average 50 on the chart and when the MACD indicator also gives us the sell signal.

The Next Few Days

From this analysis, we can sell the pair when it breaks the SMA50 down to confirm the downtrend and keep our target at the support level 1.6233 and the second one at 1.6010. However, if the pair breaks the down trend line and changes the primary trend to be up, we can buy the pair at 1.6580 and keep our target at 1.6705.

We have to be careful in the upcoming days since we have hot news like the Cash Rate from Australia and RBA Gov Lowe's Speech on Tuesday, as well as the service PMI for the UK on Wednesday.


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