The GBPAUD pair in the last weeks bounced up from the 1.7610 support area above the 1.7870 resistance, which is also the 23.6% Fibo of the descent from the almost three year high of 1.8880 to the low of 1.7630. Price tried to sustain an aggressive move down passed the recent six-month low of 1.7630 and the near low of 1.7610 from January 11. Despite strong buying interest which returned the price above the recent low of 1.7630, it is worth mentioning that the 60-day simple moving average (SMA) is nearing a bearish cross of the 200-day SMA which may revive the down push.
The momentum indicators concur with the down bias as the MACD has returned south nearing the trigger line in the negative region, whilst the RSI points down and heads for the oversold area. The ADX also confirms the strong down trend.
Any further weakening could see price fall through the low of 1.7610 towards the 1.7300 – 1.7290 support barrier which is coupled with the uptrend line from March 2017. Surpassing it could bring a test of the eleven-month low of 1.7207.
Turning north, first resistance comes from 1.7870, the 23.6% Fibo, then higher a stronger barrier to tackle would be around 1.8040 – 1.8115 where the SMAs are currently hovering, with the 38.2% Fibo of 1.8065 falling in the middle.
Overall the short-term outlook remains negative, targeting the next lows, whereas a shift above the 1.8420 resistance would turn the bias neutral.
