The British pound continues to see a lot of back-and-forth action against the Australian dollar, as we have been in a range for some time now. With this, short-term traders will be attracted to this price action.
GBP/AUD
The British pound has been somewhat choppy during the trading session against the Australian dollar on Tuesday as we initially rose but then gave back the gains. We are sitting just below the 50-day EMA, an indicator that a lot of people will be watching very closely, but if we were to break above that, then it could open up the possibility of a move to the 1.92 level. Breaking down below the 1.90 level, it opens up a bigger move to the downside, perhaps down to the 1.88 level.
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All things being equal, this is a pair that I don't trade very often, but it looks as if it is very range-bound, and that is what I'm looking for. The range-bound short-term trading here is likely to continue to be the way forward, and if that's going to be the case, then short-term traders will more likely than not take advantage of this.
Range-Bound Dynamics and Key EMA Levels
Keep in mind that the British pound is fairly strong overall at the moment, but then again, so is the Australian dollar. The size of the candlestick from the Friday session was somewhat impressive, but we are turning around, and it now looks like we are trying to wipe all of that out.
As long as the market is somewhat stabilized, then it's likely that we are going to continue to perhaps look for small moves—not big moves, but just short-term small moves. A move to the upside, the 200-day EMA would defend the 1.9350 level. Breaking above that would change everything, but we're obviously not going to be doing that anytime soon.
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