Following the massive plunge on August 3, FBP/USD entered a consolidation phase against the Australian Dollar, thus forming a relatively flat channel up. The rate, however, failed to reach the upper channel boundary in its last wave north, as sluggish UK fundamentals put a downward pressure on the British currency.
This suggests that the current upward momentum may have lost its strength, setting the pair for a fall. The upward surge mid-session demonstrated that there is still some potential north that should be realised in the upcoming hours.
Thus, the base scenario favours the rate appreciating up to the 1.6480/1.6500 area and confirming a short-term descending wedge. Consequently, the rate should breach the lower channel boundary and approach the bottom wedge line.
This suggests that the current upward momentum may have lost its strength, setting the pair for a fall. The upward surge mid-session demonstrated that there is still some potential north that should be realised in the upcoming hours.
Thus, the base scenario favours the rate appreciating up to the 1.6480/1.6500 area and confirming a short-term descending wedge. Consequently, the rate should breach the lower channel boundary and approach the bottom wedge line.
