GBPAUD Potential Pullback (Nov 7, 2014)
GBPAUD recently made a strong upside break past resistance at the 1.8400 major psychological level and may be due for a retracement.
The Fib levels based on the latest swing low and high on the 1-hour chart show that the 50%-38.2% area lines up with the 1.8350-1.8400 potential support zone.
A bounce from this region could lead to a rally back to the pair’s previous highs near the 1.8700 major psychological mark while a selloff could still find a floor at the 61.8% Fib or 1.8300 handle. However, a break below the Fib levels would indicate that a longer-term selloff is taking place.
Strong buying momentum might lead to a break past the previous highs and the creation of new ones, possibly until the 1.8900 mark. There are no major event catalysts left for a strong move until the end of the week though.
Fundamental factors suggest that the bias is a sideways move for the time being, as both BOE and RBA gave off dovish biases in their recent rate statements.
By Kate Curtis from Trader's Way