The GBP/AUD is building a consolidation pattern. The breakout direction will determine whether there will be a downtrend continuation OR a larger bullish retracement.
The GBP/AUD is most likely in a wave 4 (purple) pattern. This remains true even if a bullish breakout occurs above the resistance (orange lines) and the 144 ema close (blue). In this case, price is probably expanding the wave 4 via a WXY correction. Another ABC zigzag could occur within wave Y with a main target at 1.8750.
However, the current chart pattern is probably a bear flag or triangle pattern. The bearish breakout could confirm the downtrend within wave 5 (purple). The main support to monitor is the previous support fractal (dark green lines). A break, pullback, and continuation pattern is desired. The main targets are located at 1.78, 1.75, and 1.73.
