GBPAUD is heading for another battle with the 20-period simple moving average (SMA) in the four-hour chart after failing to close below December’s trough despite sliding to a fresh 2-year low of 1.7413.
Although in the bearish territory, the RSI and the MACD continue to make higher lows towards their neutral marks, endorsing any potential upside correction in the price.
Nevertheless, only a close above the 20-period SMA currently at 1.7500, and more importantly above the swing high of 1.7560, could generate additional gains towards the 1.7630 restrictive region, where the 50-period SMA is converging. Breaching the latter, the rally may sharpen towards the 1.7750 – 1.7790 resistance region, a break of which would shift all eyes to the 20-period SMA at 1.7870.
If the bears drive the price forcefully below the 1.7424 floor, the next stop could be the crucial level of 1.7285, which has been strictly rejecting downside movements during 2018. Beneath that, the 1.7140 has been another familiar barrier and will be closely watched ahead of the 1.7000 mark.
In brief, the short-term bearish bias in GBPAUD seems to be losing strength, with the confirmation likely coming above 1.7560. Otherwise, a sustainable move below 1.7424 could trigger fresh selling towards 1.7285.
