GBP/AUD Reaching Resistance Level at the 200-day Moving Average
The Pound to Australian Dollar has reached a ‘glass ceiling’ of resistance on price charts which will make it hard for it to rise any further.
The pair has risen up to just below the 1.6700 level where a combination of the 200-day Moving Average (MA) and the upper border of a large symmetrical triangle are situated – the triangle has been forming since October 2016.
Taken separately these levels would provide substantial obstacles to the uptrend, however, situated closely together they provide an even tougher cap which must be overcome for there to be further price gains.
Triangles are usually formed of five waves (a-e) and this triangle is probably finishing its final wave ‘e’.
If it is, then a breakout is likely to be imminent and it is possible the pair could break higher, rising out of the triangle, above the 200-day MA and up to an end target, potentially at about 1.8000, calculated from extrapolating the height of the triangle higher.
Such a move would gain confirmation from a break above 1.6850.
Alternatively, there is a chance the pair could rotate and retract back into the triangle, before falling to the base and breaking out to the downside.
