The GBP/AUD pair has found its feet at an important chart support level after the release of stronger data for sterling and a less dovish message from the ECB.

Australian retail sales came in above expectation on Friday confirming the Australian consumer is still willing to spend and provide support to the non-mining sector.

However, the data has not been enough to reverse this week's losses against the euro and British pound.

Mind you, Australian data has been mixed. Early on Thursday morning the Australian Trade Balance showed a deeper-than-forecast 3.305bn deficit which contrasted to data from the U.K revealing a robust Services sector.

The big move higher in GBPAUD however came following the ECB’s announcement of surprisingly muted easing policies.

The move by the ECB saw support for the US dollar wane across the board which aided the Australian and New Zealand dollars higher.

However, the pound sterling was a bigger a winner of the ECB decision, riding the coat-tails of the euro higher.

As such the pound to Australian dollar exchange rate gained; a welcome move for those hoping for a higher AUD but dismayed by the trend lower seen since September.

Technicals See Risks Flowing Two Ways

The support zone around 2.0470 is made up of both the S1 Monthly Pivot and a Fibonacci extension level. It is currently providing a consolidation point as demand musters.

Further evidence comes from the equal drive or zig-zag down, labelled on the chart below, which has reached a level of maturity which makes it more likely a rebound could be about to unfold.

At the moment upside and downside risks are balanced, although Australian Employment data on Thursday 10th could result in a continuation of the broad down-trend if it comes out better than analysts’ estimates.

A break below the 2.0339 day’s lows would reassert the bearish case.

Alternatively, a break above the trend-line at 2.0650 would probably result in a stronger bullish case to a target at 2.0750.