The GBP/AUD pair had a pretty volatile session during the day on Thursday, testing the 2.05 level for support. The bullish candle suggests that we are going to trying to reach towards the uptrend line that had kept the market to the bullish side, and we will more than likely find quite a bit of resistance in this area. With all that being said, the 200 day exponential moving averages just above, and when we broke down below that area I felt that the trend very well could have changed. I still believe this, at least as long as we can stay below that trend line.
I also recognize that the 200 day exponential moving average is an indicator that a lot of longer-term traders will use to determine the trend. I think that we should see some selling pressure once we get closer to that level, and continue to drop. I don’t necessarily like the Australian dollar in general, but the British pound seems to be a lot more trouble.
On the Other Hand…
If we can break above the trend line, and more importantly the 200 day exponential moving average, I think at that point in time you would have to look to see whether or not we could continue to go higher. I don’t necessarily think this is going to happen but then again this is Nonfarm Payroll Friday, which tends to be very volatile everywhere. You have to pay attention to the gold markets, because while the Australian dollar is heavily influenced by gold, that does not seem to be what’s going on here. However, if we suddenly got a rise in the value of gold that could force money to the downside in this market as suddenly the Australian dollar would be the place to be. The fact that we broke down suggests to me that this is more about the British pound than anything else.
