Long-Term Range on GBP/AUD (October 10, 2013)

Right now, it is testing the bottom of the range while stochastic is starting to move out of the oversold region. This suggests that a bounce could take place, possibly until the middle of the range around 1.7150.

Data from the UK has been weak though, with manufacturing production falling by 1.1% recently. Meanwhile, jobs data from Australia has been mixed, as hiring was weaker than expected but the jobless rate improved from 5.8% to 5.6% in September.

Going long at 1.6900 with a 100-pip stop and a target at 1.7150 would be a 2.5-to-1 trade then going for the top of the range at 1.7400 would be a 5:1 trade.

By Kate Curtis from Trader's Way