GBP/AUD

• 1H: It was correct to have adjusted the projection after the market showed less of a bearish short-term outlook, but more of a ranging mode. That’s why the 1.8100 area was support on Friday. (Refer to Daily Technical Update 12.18.2009 GBP/AUD). A break below may lead to a retracement.
• Both a pattern break below and the 78.6% retracement is at the 1.7900 area. This is one possible level the market may start to continue a rally.
• Daily: The daily look offers a longer term assessment, where the GBP has been weak against the AUD all year (since October of 2008). Therefore, bullish outlooks are all only in the short-term. A break above 1.8300, the current consolidation resistance, then a test of the 38.2% retracement (1.8700) is possible.
• If the market retraces first to the 1.7900 area before continuing this rally, the projection may be shortened to 1.8500.
• Also note the 50-day MA may become support. If these conditions meet, 50-day MA support, 1.8300 broken (especially if it also can be tested as support), THEN a significant reversal may be at hand.
• If so, the projections in the intermediate term for January 2010 would be T1: 1.9150;  T2:1.9700.
• In the short-term however, we are still in consolidation mode and may remain so just a little longer during the holiday season. But this may in turn lead to violent action.

Fan Yang
Currency Analyst
Commodity Trading Advisor

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