Is GBP/AUD set to continue trending south?

GBP/AUD traded higher on Thursday, after it hit support near 1.8530 on Wednesday. Overall, the pair has been trading below a downside resistance line since April 2nd and thus, we would consider the near-term outlook to be negative. Even if the current rebound continues for a while more, as long as it stays below the downside line, we would treat it as a corrective move.

If the bears decide to take back control from near the 1.8765 level, or near the downside resistance line, we would expect them to aim for another test near the 1.8530 barrier. If they don’t stop there, the next potential support hurdle may be at 1.8430, marked by the inside swing highs of October 3rd and 10th. Another break, below 1.8430 may carry more bearish implications, perhaps setting the stage for the low of October 11th, at 1.8275.

Looking at our short-term oscillators, we see that the RSI rebounded and exited its below-30 zone, and now appears to be heading towards 50. The MACD, although below both its zero and trigger lines, shows signs of bottoming. Both indicators detect slowing downside speed, which increases the chances for the current rebound to continue for a while more before the next negative leg.

On the upside, we would like to see a strong break above the psychological round figure of 1.9000 before we start examining whether the bulls have gained the upper hand. The rate would already be above the aforementioned downside line and could initially target the 1.9125 level, marked by the high of May 12th. If that hurdle is broken as well, then the next stop may be the high of May 7th at 1.9330. The bulls may decide to take a break after hitting that zone, thereby allowing the rate to correct lower. However, as long as such a retreat stays limited above the downside line, we would see decent chances for another leg north and a break above 1.9330. The next resistance zone lies at 1.9535, which is the high of May 4th.

gbpaud chart

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: Depressed near monthly low under 0.7200, eyes Aussie Retail Sales

AUD/USD fades pullback moves from multi-day low of 0.7153 around 0.7180/75. Recovery in market sentiment fails to help the bulls as US dollar stays strong. Aussie PMIs, Preliminary Retail Sales for September are in the spotlight, for now.


GBP/USD falling in largest monthly drop since March

GBP/USD bears stay on top, taking the pair down in the largest monthly percentage drop since March. Brexit, COVID-19, negative rate sentiment and risk-off environment playing in the hands of the bears.


Gold licks its wounds around $1,900

Gold pulls back from $1,898.57 after two consecutive days of downside. Broad US dollar strength becomes the key catalyst. A busy day ahead as Japan returns from extended weekend and monthly PMIs are up for a grab.

Gold News

Dollar rally sends these currencies to 1 month lows

The US dollar traded higher against all of the major currencies on Tuesday on the back of relatively neutral comments from Federal Reserve Chairman Jerome Powell. Although Powell described the outlook as highly uncertain and ...

Read more

WTI: Trapped between key hourly averages ahead of API data

WTI (futures on NYMEX) consolidates the bounce above the $40 barrier, having regained the 21-hourly Simple Moving Averages (HMA), currently at $39.75.

Oil News

Forex Majors