Is GBP/AUD Ready to Complete a 'Double Top'

GBP/AUD traded lower today, after it hit resistance at 1.9220, near Wednesday’s and Thursday’s peaks. Although the rate is still trading above the upside support line drawn from the low of December 23rd, it has distanced itself from that line, while on the 4-hour chart, we see a possible “double top” pattern forming. For now, we will stand flat, but if the double top is indeed completed, we will turn our eyes to the downside, perhaps for a deep correction.

The completion of the pattern could be signaled by a dip below the 1.9095 zone, which acted as a decent support yesterday. If so, more bears could wake up and drive the battle towards the psychological zone of 1.9000, marked slightly below the high of January 17th. The rate could rebound somewhat from there, but if it stays below 1.9095, we would see decent chances for the bears to jump back into the action and push lower, perhaps bypassing the 1.9000 hurdle. Something like that could set the stage for the crossroads of the aforementioned upside line and the 1.8895 support, defined by Tuesday’s low.

Shifting attention to our short-term oscillators, we see that the RSI, although above 50, points down. It could fall below that equilibrium line soon. The MACD is also within its bullish territory, but below its trigger line, pointing south as well. Both indicators suggest that the pair has run out of positive momentum and corroborate the case for some near-term declines.

On the upside, we would like to see a clear and decisive break above 1.9255 before we start examining whether the prevailing uptrend has resumed. Something like that would confirm a forthcoming higher high on both the 4-hour and daily charts and may set the stage for the 1.9365 or the 1.9385 barriers, marked by the peak of December 17th and an intraday swing high formed the day before. Another break, above 1.9385, could extend the advance towards the 1.9515 territory, near the highs of December 13th and 16th.

GBPAUD - One-stop Multi-asset Experience for Trading and Investment Services



The content we produce does not constitute investment advice or investment recommendation (should not be considered as such) and does not in any way constitute an invitation to acquire any financial instrument or product. JFD Group, its affiliates, agents, directors, officers or employees are not liable for any damages that may be caused by individual comments or statements by JFD Group analysts and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his investment decisions. Accordingly, you should seek, if you consider appropriate, relevant independent professional advice on the investment considered. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with the legal requirements for financial analyses and must therefore be viewed by the reader as marketing information. JFD Group prohibits the duplication or publication without explicit approval.

84.25% of the retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. Please read the full Risk Disclosure:

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Analysis

Latest Forex Analysis

Editors’ Picks

AUD/USD keeps gains above 0.7300 on PBOC's status-quo

AUD/USD picks up fresh bids and regains 0.7300 amid fresh US dollar selling across the board, as the market sentiment remains mixed starting out a fresh week.  Upbeat comments from Aussie PM Morrison and Chinese President Xi Jinping favor the bulls despite PBOC's status-quo. 


USD/JPY extends losses below 104.50 amid risk-aversion

USD/JPY resumes its decline towards 104.00 amid risk-off action in the Asian equities and broad dollar weakness. Markets in Tokyo are off for Respect-for-the-Aged Day, Focus shifts to the Fed Chair Powell's speech. 


Gold due for a breakout, according to key indicator

Gold's multi-week consolidation in a narrowing price range could end with a bullish breakout, as a widely-tracked daily chart indicator is about to turn bullish. The yellow metal has carved out a descending triangle pattern over the past four weeks.

Gold News

The week ahead: Central bankers’ chance to explain themselves

Global equities took another hit at the end of last week, and as we start a fresh week there is some concern that volatility could be creeping back into the markets and that tech has lost some of its lustre, along with gold, which also ended the week lower. 

Read more

WTI buyers attack $41.00 amid US-Iran tension, escalating virus woes

WTI remains heavy below 50-day SMA, drops from $41.18 to begin the week. The energy benchmark keeps trailing 50-day SMA for over two weeks while taking clues from the US-Iran tussle and the coronavirus (COVID-19) headlines. Hopes of further stimulus, China’s optimism favor energy bulls.

Oil News

Forex Majors