GBP/AUD steps on key trendline after five bearish weeks [Video]
|Although the bearish intersection between the 20- and 50-day SMAs keeps promoting the negative trajectory in the short-term picture, the pair seems to have already met oversold conditions according to the momentum indicators; the RSI is charting a higher low above its 30 oversold level, while the Stochastics are also trending higher after bottoming out below 20.
Looking for resistance levels, the 1.8540 restrictive territory could apply some downside pressures to upside corrections with the help of the 20-day SMA at 1.8580. Crawling higher, the price may get congested somewhere between the 1.8677 barrier and the 50-day SMA at 1.8727, while not far above, a close on top of the swing high of 1.8770 could debunk another extension up to the tentative descending trendline stretched from the 2020 top of 2.084.
Should the supportive trendline crack, selling pressures could temper towards the 1.8220 – 1.8165 region. The pair has been frequently testing that territory over the past two years, and the 23.6% Fibonacci retracement of the 2020 – 2021 downtrend is also in the neighborhood. Therefore, any close lower from here could step up bearish actions likely towards the 1.8070 – 1.8010 zone.
In brief, GBPAUD has the potential for an upside reversal near a crucial supportive trendline. Failure to bounce on that line could add more legs to the ongoing sell-off.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.