Last week the GBP/AUD hit a low of 1.4965, establishing a 3 touch trend line extending from the February 2012 lows through the August 2012 lows. The pair fell for the first few days of the week but rebounded in the last 3 days of the week to close higher than it opened and forming a Bullish Pin Bar in the process. The pair now faces resistance from the November 2012 lows at 1.5182 with last week's high being only 3 pips higher. If the pair can recover from this level, there is a high probability that it will shoot for the ascending triangle high which coincides with the Monthly R2 at 1.5930. There is a long way to go before we hit that level however, so look for additional resistance at the January 22 high of 1.5320 which also coincides with the Weekly R2 and the 62 Week Moving Average at 1.5417. If things turn sour for the bulls and the bears take over again look for a break of last week's low to confirm. Below 1.4965 there is very little resistance until around 1.4711 & 1.4555 beyond that. Although last week's Pin Bar suggests higher prices, there appears to be a momentum shift happening in both the GBP and the AUD...so caution is key.
Happy Trading!