GBPAUD is in fight again with the upper surface of the narrow descending channel that has been holding since the beginning of April with scope to end the bearish cycle after finding strong support near 1.8050.
The persisting positive momentum in the RSI and the MACD, which is correcting towards the bullish area, is an encouraging signal that improvement may continue in the short-term. However, only a clear break above the channel could boost buying interest towards the nearby 1.8652 resistance zone, where the 23.6% Fibonacci of the downleg from 2.0591 to 1.8050 happens to be. Crawling higher, the price could hit a tougher barrier around the 38.2% Fibonacci of 1.9023 and the longer-term simple moving averages (SMAs).
n the event the price fails to exit the channel, it could reverse lower to re-test the 1.8050 support region. Breaching that floor, the decline could sharpen towards the 2019 lows registered between 1.7788 and 1.7667.
Looking at the six-month picture, the pair has resumed a downward direction since the break below 1.8652 and the bearish cross printed within the 50- and 200-day SMAs is currently discouraging any outlook improvement.
Summarizing, GBPAUD’s short-term bias could turn positive above the channel, likely sending the price up to 1.8652. On the other hand, a drop below 1.8050 could generate additional selling interest.
