GBPAUD has been trending higher in its ascending channel on the daily time frame for nearly three years already, and it looks like a strong bounce off support is about to happen again.

If so, price could make its way to the mid-channel area of interest around 1.8700 or even the channel top closer to 1.9500. However, the 100 SMA is below the longer-term 200 SMA to indicate that the path of least resistance is to the downside or that bears might be taking over. In that case, a break below support at the 1.8000 handle could signal that a long-term reversal is in the works.

RSI is still heading up to indicate that buyers have the upper hand and have enough energy to push for more gains. Stochastic is also pointing up to indicate the presence of bullish momentum and has room to climb before reflecting overbought conditions.

The UK Supreme Court ruling on prorogation could determine where sterling might be headed next as the decision would likely influence the possibility of a “no deal” scenario. Deciding against the constitutionality of PM Johnson’s intent to prorogue could give lawmakers more time to block a “no deal” exit or seek an extension past October 31.

The pound also has to contend with UK CPI data and retail sales figures, as well as the BOE decision. No actual changes are expected for now, but the central bank might maintain its optimistic view since recent economic reports have been mostly upbeat. Assuring that the UK economy could stay resilient even with Brexit uncertainties could also push the pound higher.

Meanwhile, the Aussie could continue to take cues from overall market sentiment and Chinese data. Sustained risk-taking on improving trade relations between the US and China could keep the higher-yielding currency supported while signs of tension could spur another leg lower.