The Pound has risen up to a key watershed level against the Australian Dollar which if broken could offer potentially much better exchange rates.

The level comes in the form of a downward-sloping trendline which has resulted from the Pound's long-term decline against the Aussie Dollar.

Trendlines tend to encourage binary outcomes: either a breakout above or a recapitulation below, and this one is no different:

The short-term trend remains up ever since the recovery from the August lows and so we continue to favour more upside and a breakout higher, but only if confirmation is gained from a break above the September 28 highs at 1.7183.

Such a move would be expected to probably reach the 1.7300 level - although it could go even higher in the absence of any major chart resistance levels.

Alternatively, a move below the 1.6776 lows could prompt a bearish break lower, to a target at the 200-day moving average, which is a likely to break its fall at 1.6670.

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