Somewhat choppy price action over the past few weeks from both currency pairs as the tug of war between the British Pound and Australian Dollar continues. After a slew of monetary and fiscal policy changes from the respective countries, the pair has struggled to find a decisive direction.
On higher technical timeframes such as the Weekly and Daily paint a clear picture of the overall trend, which in this instance is Up. However, price has struggled a few occasions trying to burst above 2.0200 with the most recent push coming from the Pound going into last Friday’s closure. Despite the volatility surrounding the market as an effect from the Coronavirus, Technical Analysis can give traders a good idea as to which direction price will move.
Currently holding above 2.0200 on the 4hr timeframe, the GBP in the early hours of the morning will most likely attempt a push into the daily supply/resistance region of 2.0230 – 2.0250. Now, should price break above and beyond that region with a strong bullish candlestick then we may see higher prices into 2.0700 respectively. A push back below 2.0200 can see the Australian Dollar pick up strength and attempt a move back into hourly demand zones holding at 1.9975 – 2.0000 respectively.