Last week I asked whether time is running out for the Australian dollar versus the British pound. Apparently, the answer is yes.
The very next day, the GBP/AUD currency pair surged upward through the previous trading channel. Only the 200-day moving average (DMA) stopped the momentum. But even that reprieve looks very temporary. As of the time of writing, GBP/AUD is already retesting the 200DMA, and I do not expect the resistance to last much longer.
Click chart for a larger view
Source: FreeStockCharts.com
The surge out of the channel represents an acceleration of the building uptrend. If recent history is any guide, I expect GBP/AUD to rise relatively quickly into the 1.55-1.60 range. I will look to trade the Australian dollar long again around those levels given my bearishness on the British pound. The standard wildcards of economic releases and statements of monetary policy are likely more than ever biased against the Australian dollar given increasing nervousness about China’s economy.
Be careful out there!
Full disclosure: no positions