This Danske Bank bank analysis explains how on OCT 10 brexit may have a delay (85% Chance) which will ease investors fears of a hard brexit, which in turn will give GBP strength. The overall downtrend is still strong from a technical perspective. US and China are scheduled to resume trade talks at the same time as the Brexit deadline. If trade tensions with US and China get worse the assets in AUD and NZD that china is holding will continue to hurt with the negative sentiment of a no deal. Before GBP appreciates if negative sentiment in US China trade war is the main focal point of OCT 10, GOLD will appreciate causing GBPAUD to continue the downtrend possibly another 262 PIPS for a potential sell. AUD tends to positively correlate with gold . After investors finish the bull run on Gold , AUD can potentially lose steam on the bull run from gold and reverse at the monthly support i noted on GBPAUD from the fears of a hard brexit dissipating.
From the potential buy at 1.78800 in the middle of 71.8 FIB to 61.8 FIB , there is a possibility it can wick down towards the 61.8 fib
- If the monthly support is broken then the long position is invalid, and i would recommend the Stop Loss at 1.77000
Signs of a higher lows and a potential reversal shows that the 50% fib is strong for reversals, the overall tendency of politicians is to postpone important decisions which makes sense there is an 85% chance of an extension up until JAN 2020 with a snap election.
From the recommended entry there is a possibility of a 180 PIP drawdown so add lot sizes appropriate with your risk management strategy. The potential reward can be 820 PIPS in the middle of the 88.6 FIB and the 100.0 FIB i have a recommended TP towards what i believe is a which can cause the long to reverse.