After four weeks of being range-bound during which time the pair formed a barbed wire pattern on the W1 time frame consisting of four bars, GBP/AUD is on its way to a trend reversal from an upward to a downward trend.
The weekly bar from last week closed as a very impressive pin bar under the monthly and W1 resistance at 1.81654.
My expectation is that during the next week the downward trend will lead the pair to the support trend line of the upward trend (in red) or even a little lower, to the 1.7950 – 1.7850 zone.
This zone is a strong support for the GBP and the pair won’t overcome it easily. If the breakout does occur we could we expect the downward trend to continue to 1.7100 – 1.7000.
The alternative scenario is for a renewal of the rally, but I think it looks less valid for the moment.