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The British pound was seen trading lower not only against the US dollar, but also against other major currencies such as the Aussie dollar and the Euro. The GBPAUD collapsed recently and traded as low as 1.7979. The pair is now trying to hold the ground and forming a breakout pattern, which is likely to act as a barrier for the British pound buyers. There is no major release lined up in the UK and Australia, which might cause ranging moves in the GBPAUD pair. We need to see how the pair reacts in the coming sessions and whether it corrects higher or continues to move lower.
There is an ascending channel formed on the hourly chart of the GBPAUD pair, which might act as a catalyst in the short term. The pair is trading in a narrow range as of writing and looks set for a break lower or higher. The pair is currently trading around the 38.2% fib retracement level of the last drop from the 1.8174 high to 1.7979 low. There is a chance that the pair might break higher and move towards the 61.8% fib level. However, there has to be some liquidity for a substantial move higher. The hourly RSI is heading towards the 50 level, which might act as a hurdle for the pair moving ahead.
On the other hand, if the pair breaks lower and settles below the channel support area, then a move below the 1.7970 level is possible in the near term.
Overall, one might consider buying or selling with a break of the channel in the short term.
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Posted By IKOFX Technical Team: Online Forex Broker
Website: http://ikofx.com
