Fundamentals:- I have chosen this trade primarily in the expectation of a weaker GBP due to the reduced CPI that was recently released and the lack luster wage growth which the BoE are watching closely. There are still pressures from Brexit although the economy has been recovering moderately since the recession. On the Australian side of the trade their economy has also been recovering moderately and although it missed expectations on q/q CPI trimmed mean CPI came in slightly higher that previous. Although long term we expect the GBP to return to pre Brexit vote levels against the AUD in the short to mid term we expect to see another move down.
Technicals:- As you can see from the chart the sideways channel has a slight downward bias and is unlikely to make new highs due to the UK data. If the resistance level holds then we can expect a return to the base of the cannel and possibly a breakout to the downside to retest previous confluence levels.