At the time of writing, GBPAUD has soared by 128 pips from today’s low, but at one point the price was up by 171 pips reaching a high of 1.7926. The rise comes after that Boris Johnson was confirmed to be the next UK PM, as the markets is starting to get clarity.
In early May, the GBPAUD reached a high of 1.8885, however as rumors started flourish about Theresa May’s resignation the British pound started to decline, on worries that “BoJo“ could be the next PM, and that he would drive a hardline vs. the EU. As this is no longer speculation that BoJo will be the next PM we have seen the GBPAUD stabilize.
However, I don’t think the pair is out of the woods yet because of the high probability of a clash between the UK and EU so the risk remains high that GBPAUD trades lower in the months ahead.
Technical analysis hinted in June 27 that the price could slide to 1.7366 on the break to the April and June lows. The price slid as low as 1.7628, and is now correcting but there is strong resistance near the July 10 high of 1.8050, and the April low of 1.8099. I suspect that as long as the April low of 1.8099 holds that GBPAUD can ounce again turn lower in the weeks ahead, and finally reach its target of 1.7366 as per the double bottom chart pattern.Don’t miss a beat! Follow us on Twitter.