The GBP/AUD pair rallied during the day on Wednesday, reaching towards the 2.15 handle. This is an area that I see quite a bit of resistance at though, so while the day did look rather strong, the reality is that we still have a pretty significant barrier to get above in order to continue with the move higher. If we can get above the 2.15 level however, I feel that the market will then reach towards the 2.20 level. That of course would be a very bullish sign, so on a daily close above that level I will start buying on short-term pullbacks as the market should continue to go much higher.
If we fall from here, I have no interest in selling because I think there is far too much in the way of support below. Also, if you give in mind that the British pound is most certainly a lot stronger than the Australian dollar, at least from a historical perspective. The British pound has been rising overall for much longer than the Aussie dollar has, so having said that I don’t think it makes much sense that this pair sells off drastically.
Patience will be needed
I believe that patience will be needed in this pair though, because it will be quite choppy. The one thing that they do like about this market is that the European Central Bank has an announcement today, and that of course can cause quite a bit of chaos around the currency markets. However, this features 2 currencies that have nothing to do with that, so quite frankly it might have a little bit more of a stable feel during the day.
I believe that the 2.10 level below is massively supportive and is essentially the “floor” that we are working with at the moment. Because of this, I don’t really have any interest in selling anytime soon, and look at any pullback at this point in time is simply offering value in the British pound. In fact, I do not believe that this pair breaks down until gold breaks out significantly.
