GBPAUD recently fell through the bottom of its symmetrical triangle on the 4-hour chart to signal that a selloff of the same height as the pattern is in order.

Price might need to retest the broken support before heading further south, and the Fibonacci retracement tool shows where more sellers are waiting. The 61.8% level is closest to the triangle bottom around 1.7737 while the 50% Fib is at 1.7675. A shallow pullback could resume the slide at the 38.2% Fib at 1.7614.

The 100 SMA is below the 200 SMA to confirm that the path of least resistance is to the downside or that the selloff is likely to resume. The 100 SMA also lines up with the area of interest at the 61.8% Fib.

Note that the chart pattern spans around 500 pips, so the drop could last by the same amount. The gap between the moving averages is also widening to reflect strengthening selling pressure.

However, stochastic is already indicating oversold conditions or exhaustion among sellers, and turning higher could indicate that buyers are returning. Similarly RSI has been pulling up from the oversold zone to suggest that buyers are taking over while sellers take a break.

The selloff could resume as soon as the oscillators hit the overbought region and turn back down.

Sterling remains under downside pressure on account of all the uncertainties facing the UK economy. For one, harsher lockdown measures have been put in place to curb the spread of the new strain of the COVID-19 virus. Apart from that, Brexit is likely to keep businesses in limbo even as the UK struck a deal with the EU on the fisheries issue late last year.

Meanwhile, the Aussie could continue to benefit from risk-on flows stemming from stimulus and vaccine rollouts. In addition, the prompt response of Australia to limit the impact of the pandemic could keep their currency afloat.