GBPAUD has recorded a downtrend since last peaking at a nine-month high of 1.7650 on May 10. However, the pair is currently finding difficult to reach above 1.70 handle as the short-term bias remains bearish, while medium-term outlook continues to be neutral.
In the near-term, technical indicators do not point to any disruption of the current bearish bias pattern. Instead, there is more risk to the downside, as prices have crossed below the Ichimoku cloud, as well as the 50-day and 200-day exponential moving averages (EMA), while if prices fall below the previous low of 1.6611, an extension of the current downtrend might occur. Moreover, the RSI and the MACD give an additional bearish signal, fluctuating below their thresholds. The RSI has been trending down under 50 since July 10, whereas the MACD despite pushing higher on June 30, has flattened out in negative territory.
Should the pair build on the downside momentum, it would find support first at the previous low of 1.6611 and then at 1.6570, which is the 61.8% Fibonacci level of the March-May upleg from 1.5902 to 1.7650. Further declines, would touch the 78.6% Fibonacci of 1.6257.
Alternatively, resistance is expected at the 50% Fibonacci mark of 1.6775, while a stronger barrier to upside movements is likely to be found around the 38.2% Fibonacci of 1.6980, between the two EMAs and within the Ichimoku cloud. The latest top of 1.7121, could also act as a potential resistance.
Looking at the medium-term picture, the market maintains neutral as long as it ranges between 1.7800 and 1.5742.
