Technical Analysis – GBPAUD at a crossroads as bears come up against a long-term trendline
June 16, 2023 9:26 am
GBPAUD is hovering just above the 1.8517 level, testing the support set by the September 26, 2022 upward sloping trendline. This is a key moment for this pair as a break below this long-term trendline would open the door to a much stronger correction, cancelling the recent bullish pattern of higher highs.
The anticipation is depicted in most momentum indicators. The Average Directional Movement Index (ADX) is hovering around its 25-threshold and hence remains in waiting mode, and the RSI stands just below its 50-midpoint. More importantly, the stochastic oscillator is trading in its oversold (OS) area. While it can stay there for a while, a potential cross above its moving average could serve as an early bullish sign.
Breaking the September 26, 2022 trendline appears to be the biggest challenge for the bears. If successful, the 1.8517 level is unlikely to trouble them as they would set their eyes on a bigger prize. The busy 1.8320-1.8332 range set by the November 2, 2009 high and the 100-day simple moving average (SMA) respectively would really test the bears’ determination.
Should the GBPAUD bulls try to recapture the market reins, they would quickly aim to break the 1.8713-1.8724 range defined by the October 1, 2018 high and the 50-day SMA. The path then appears to be clear until the April 28, 2023 high of 1.9034, just below the busier 1.9183-1.9220 area.
To conclude, the biggest battle for GBPAUD is unfolding as the support set by the September 26, 2022 trendline will determine the next short-term trend.
GBPAUD is hovering just above the 1.8517 level, testing the support set by the September 26, 2022 upward sloping trendline. This is a key moment for this pair as a break below this long-term trendline would open the door to a much stronger correction, cancelling the recent bullish pattern of higher highs.
The anticipation is depicted in most momentum indicators. The Average Directional Movement Index (ADX) is hovering around its 25-threshold and hence remains in waiting mode, and the RSI stands just below its 50-midpoint. More importantly, the stochastic oscillator is trading in its oversold (OS) area. While it can stay there for a while, a potential cross above its moving average could serve as an early bullish sign.
Breaking the September 26, 2022 trendline appears to be the biggest challenge for the bears. If successful, the 1.8517 level is unlikely to trouble them as they would set their eyes on a bigger prize. The busy 1.8320-1.8332 range set by the November 2, 2009 high and the 100-day simple moving average (SMA) respectively would really test the bears’ determination.
Should the GBPAUD bulls try to recapture the market reins, they would quickly aim to break the 1.8713-1.8724 range defined by the October 1, 2018 high and the 50-day SMA. The path then appears to be clear until the April 28, 2023 high of 1.9034, just below the busier 1.9183-1.9220 area.
To conclude, the biggest battle for GBPAUD is unfolding as the support set by the September 26, 2022 trendline will determine the next short-term trend.
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