GBP/AUD – Prime Minister Boris Hospitalised, Poor Data & An Everlasting Brexit

Good day traders and welcome back to another market breakdown on the currency pair GBPAUD. Let’s recap the rollercoaster of a week we’ve had so far.

After slowing down around the regions of 2.05000, we saw a decline before last weeks closure. In anticipation of further downside, we had our analysis plot with sell limits off of 2.05000, however on the opening of the market, we had a major gap in price amounting to 160 pips. After seeing a retracement of roughly 140 pips, price then took another dive without closing the gap. Major selling pressure has been seen, with a total decline of 580+ pips.

What has been the cause for all this? Well for starters, Boris Johnson, the Prime Minister of the UK has tested positive for the corona virus, with further reports this week that he was hospitalised. We then saw poor construction PMI data coming in at 39.3 with the forecast being 44.0 . One thing to note is that any figure below 50.0 is negative, so the original forecast was negative and we came in with an even worse figure.

To make matters worse, Boris Johnson was then admitted to intensive care adding fuel to the fire. This has all come in a time of uncertainty as well as a huge inconvenience with even further extensions being asked for on Brexit. This has caused outrage as talks are supposed to continue in April and May according to Michael Barnier, The European Commission’s Head of Task Force for Relations with the United Kingdom, however opposing parties look for a delay in December deadlines. Many are saying Covid19 is being used as an excuse to extend the transition period but this shouldn’t occur.

On a lighter note, Boris Johnson is stabilising and we have seen a slowdown around the pound currency, we may now see slight relief before gaining further guidance in trend direction.


Starting on the daily timeframe, we’ve seen price come into the top end resistance of May 2016 and seen 2 wick rejections, in our prior article on GBPAUD, we anticipated 2.06000 being reached which we came just 5 pips shy of, before seeing a 3 pin pattern and rollover. Our bottom end support zone that has been marked up lies between 1.97500 and 1.98350.


On the 4 hour timeframe, we have placed a fibonacci tool from low to high and we’ve identified two areas where price could react. We have rejected the 61.8 once which falls in line with prior support and a psychological level fo 1.99250. Another level is the psychological level of 1.97500 in line with another fibonacci region. This lines up with a trend line test as well, should 1.99250 break and close below, followed by a retest, we could see 1.97500.


On the 1 hour, price is exhausted around 2.01000 and we look to retest 1.99500 and potentially lower. We have also marked on the lower high, lower low sequence, which was then followed by a break of structure making a new higher high. The next anticipated move is a higher low. From 1.99000 we can assess whether or not price could reverse and make its way Ito our orange zone located around the 2.02000 handle or should we continue to slide to 1.97500.


On the 15 minute we have a descending channel which may find support, however we are anticipating the lows to be tested before any upside moves. Should we see 1.98900 tested and we find reversal patterns, we may ride price back up into 2.02000 for a 310 pip move. 1.99900 is also a pivotal point for GBPAUD, so remain cautious and trade safely with correctly applied risk management. Thanks for tuning in, if you’re new, subscribe to blog for email updates.

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