The Pound to Australian Dollar fell to lows of 1.6757 after Sterling's deep decline following the general election.

The sell-off probably completed the c-wave of a three wave a-b-c correction from the early May highs.

It is possible the correction could now be finished and the next move will be up as the short-term uptrend resumes, which would probably eventually break back above the 1.7665 highs and move higher towards the next target at 1.8000.

Such a move would probably eventually break back above the 1.7665 highs and rise towards the next target at 1.8000.

The pair’s lows coincide with the 50% Fibonacci level and the 200-day moving average at 1.6711, an area of support highlighted by the green-hatching on the chart below.

The 50% level is the halfway point of the previous up move (from March to May); research has shown this to be a significant support level where prices often stall, consolidate or even reverse trend.

Moving averages, like the 200-day, are dynamic levels of support and resistance where prices often coalesce, stall and go sideways, or sometimes even reverse trend completely.

For stronger confirmation of a bearish continuation we would ideally wish to see a break below the 50% Fibonacci level and the 200-day.

This would be confirmed by a move below 1.6600 – such a move would then be likely to fall to a target at 1.6500.

If 1.6757 holds then the uptrend will technically remain intact.

This might lead to a rebound and a possible break above the 1.7665 highs to a target at 1.8000 eventually.

Data, Events to Watch for the Pound

Pound Sterling Live will be covering the political landscape and its impact on Sterling.

We see the prospect of a stronger Pound should the election outcome point to a softer-Brexit.

"The UK election outcome raises a potential for an alternative to the hard Brexit which was what PM May was seemingly pushing for," says Viraj Patel at ING Bank N.V. "The loss of the Conservative seats has exposed vulnerability to the strategy PM May was pursuing and leaves her very vulnerable within her party. She now needs to accept a broader range of views within the party to secure a leadership."

In terms of hard Brexit, which GBP crosses seems to be pricing in, it would be difficult to push it through the UK Parliament given the fragile Conservative-DUP confidence-and-supply deal.

"Hence, we see more room for re-pricing," says Patel.

ING are now actually willing to bet on a rise in the value of the Pound and "prefer to go long GBP against USD given our constructive EUR/USD view."

But, keep one eye on data for surprises.

A busy week for the Pound kicks off with May inflation data at 09.30 BST on Tuesday, which is expected to show a slower 0.2% rise compared to the 0.5% rise in April.

Employment data is out at 9.30 on Wednesday, June 14, and although the unemployment rate is forecast to remain at a very low 4.6%, it is the average earnings statistic which will be the centre of attention given economists concerns about falling real earnings impacting on consumer spending.

The May retail sales release is out on Thursday Morning a 9.30, and is forecast to show a dramatic slow-down, and even a -0.8% contraction compared to the previous month rise of 2.3%.

The Bank of England (BOE) rate meeting is on Thursday at 12.00 but no change in policy or voting is expected, and arch-hawk Forbes will not be present.

Data, Events to Watch for the Australian Dollar

The first event to watch for the Aussie is on Monday at 09.30 BST when Reserve Bank of Australia assistant governor Debelle is planned to speak, however, given the unchanging outlook for Australian monetary policy it is unlikely to have much impact on the Aussie; Debelle is also expected to speak at 8.40 on Thursday.

The next major release is on Thursday, June 15, at 2.30 when Australian Employment statistics are released.

Analysts expect a 10k rise in May, and for the Unemployment rate to remain at 5.7%.

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