The March we were waiting to see if Britain's exit from the European Union would become a reality after the British Parliament agreed to activate Article 50 and officially begin the process. Prime Minister May has announced that she will finish the Brexit procedures by the end of March, meaning the UK will be expected to have left by the summer of 2019, depending on the precise timetable negotiated with the EU. This is why we have to be careful in our trading position in the next few days.
Today we would discuss the GBP/AUD currency pair in an attempt to take advantage of the Brexit. Last time we talked about this pair was a month ago when it was trading around 1.6170 and we recommended buying it. We made more than 180 pips as profits, but today we would open the opposite position, so let’s have a look at the H4 chart.
The pair is trading inside a downward price channel and is forming down tops inside it and ahead of the upper limit we’re awaiting because it’s a resistance area. It’s expected that the pair will still trade inside the channel. We have a moving average price for the last 50 candle based on the 4-hour chart which is resistance level this time. The RSI indicator is at 60 level now, so we can wait for the 90 level and sell the pair.
The Next Few Days
From this analysis we can sell the pair when it touches the SMA50 around 1.6100 and sell it again if it rises to 1.6140. We should keep our first target at 1.6040 and the second one at 1.5880 if the pair is still trading below 1.6230. If it breaks this level, we can buy it and keep our target at 1.6475.
We have to be careful about the upcoming hot news like Monetary Policy Meeting Minutes from Australia and the CPI from the UK tomorrow, as well as the retail sales from the UK on Thursday.
