GBP/AUD: Bullish Momentum Play

Barring any Brexit headline that distorts the current price action, the pair looks poised to be a rather interesting proposition to play the long side. As we can observe, in the last 48h, volume has been trapped to the downside, which further vindicates what side is most in pain (those caught short). In terms of valuations, the rampant move in the UK-AU bond yield spread legitimizes higher levels too. Besides, as the correlation coefficient demonstrates, this week is all about tracking Aussie yields, hence why looking to join the bid for an eventual target of 1.84 or beyond seems a sensible strategy.