currency pair is close to an important support near 1,772 level which is 2014 low and possible wave 3 end. If we take away the fact that 5 wave structure should be in the bigger trend direction (which is an uptrend on bigger time frames for GBP/AUD
) then the downside scenario is valid and if price manages to go lower then 1,772 low then way to 1,74 and 1,69 levels should be open and we might see an wave 5 which should end the downmove started in January. There's also an bearish flag
present on the daily chart
which was broken last week but as stated before I'd be cautious with any shorts as long as we won't get an daily close below 1,77-1,772 level.
On the other hand there's Fundamental point of view which may supports GBP recovering against Australian Dolar. The MPC
rates vote which shows that 2 members wanted to rise rates on the last meeting suggest that Great Britain will be the first Big Central Bank
to start normalysing the monetary policy
. Also there's RBA in Australia which is not really happy with to strong Australian Dolar and trade balance data shows that's not good for Australian economy also.
To sum Up I'd rather be long from where we are now with some big targets in mind and stops below 1,77 level. IF 1,77 level is broken then more downside is expected.