The British Pound tumbled yesterday against most of its major counterparts after Foreign Secretary Boris Johnson resigned. GBP/AUD felt the heat as well and moved lower. The move pushed the pair out of the range, between 1.7735 and 1.7980, that it was trading within, which now raises concerns over the Pound’s strengthening capabilities. For the short run, we will take a cautiously-bearish stand and aim for lower levels.
Currently, the bulls are trying to get a bit of their lost grounds back by pushing GBP/AUD towards the lower side of the range that it broke yesterday. A reversal back down from the 1.7735 zone could open the path towards the next key area of support at 1.7625, a break of which could mean that GBP/AUD has been shaken now and we could see further declines. It is good to keep 1.7530, marked by the low of 12th of June, on our radar as the next potential area of support.
Our oscillators, the RSI and the MACD, are looking quite negative at the moment. The RSI is below zero and near the 20 zone. The MACD is below both the trigger and zero lines, which adds more negativity to the near-term outlook.
Alternatively, if the bulls decide to fight back in full and break the 1.7800 area, this will turn the outlook back to flat, as the rate may continue to recover within the aforementioned range. If the 1.7800 area is broken, the pair could continue climbing higher to the 1.7880 hurdle, a break of which could open the path towards the 1.7950 or even 1.7980, which is the upper side of the range.
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