GBPAUD has hit some sticky ground around its 50% retracement zone from this month’s high after a stunning rally earlier in the week. This morning we noted that EURAUD has reached a critical juncture, and the same thing can be said of this pair. Both pairs have been propelled higher by an army of bulls this week and both are now looking a little shaky.
While the technical outlook for GBPAUD is more neutral than EURAUD, there are still some bearish indicators. On a daily chart, a bearish doji star candlestick formation has developed over the last couple of days (see chart). This candlestick pattern can indicate a reversal in price action, although we are waiting to see what happens when the pair possibly reaches a grouping of daily SMAs.
Daily MACD is in neutral and daily RSI has flatlined around 50, which may indicate that momentum could go in either direction. In saying that, the failure of the pair to push through the aforementioned 50% retracement and the subsequent completion of the bearish doji star formation has pushed our bias into mildly bearish territory. A break of the SMA grouping would strengthen this negative outlook, while a break of the aforementioned 50% retracement level would negate it.
Source: FOREX.com
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