After its strong selloff in the past few days, GBP/AUD seems ready to make a retracement to an area of interest. On the 1-hour time frame, it can be seen that the broken support level is right in between the 38.2% and 50% Fibonacci retracement levels, making it a good sell area.
Stochastic is still climbing though, which means that the pair has momentum to climb before resuming its selloff. Setting a short order at 1.8250 with a stop above the 61.8% Fib level and a target at the previous lows near 1.8000 could yield a good return on risk.
By Kate Curtis from Trader’s Way