GBPAUD records another red candle, at lowest point since mid-July
Aggressive bearish trend continues since August 17, 2023 peak
Momentum indicators favour the current move but exhaustion signs could emerge soon
GBPAUD is continuing its downward move with the bears appearing determined to recover a good part of the losses incurred during the September 2022-August 2023 uptrend. GBPAUD has cleared a crucial region, but it is now approaching a critical area that could determine the next leg.
In the meantime, the momentum indicators are clearly supportive of the bears’ determination. The RSI is hovering at its lowest point since the September 2022 downleg, while the Average Directional Movement Index (ADX) trades at its highest level since March 2022 and thus signaling a very strong bearish trend. Interestingly, the stochastic oscillator remains stuck at the bottom of its oversold territory, where it can stay there for a while before signaling a reversal.
Should the GBPAUD bears feel confident, they would try to overcome the critical 1.8517-1.8724 range, which is populated by the October 11, 2018 high, the 200-day simple moving average (SMA) and the 78.6% Fibonacci retracement of the January 28, 2022 – September 26, 2022 downtrend. If successful, they could have a go at testing the support set by the November 2, 2009 high at 1.8320.
On the flip side, the bulls are probably trying to put a temporary stop at the current bearish leg. They could try to push GBPAUD above the busy 1.9160-1.9220 that is defined by the January 24, 2014 and the January 28, 2022 highs, and the 100-day SMA. They could then try to stage a move towards the busy 1.9521-1.9408 and put a dent on the bears’ current momentum.
To conclude, GBPAUD bears are firmly in control and are looking for an even more aggressive downleg. However, the bears are probably setting up their defence.
GBPAUD records another red candle, at lowest point since mid-July
Aggressive bearish trend continues since August 17, 2023 peak
Momentum indicators favour the current move but exhaustion signs could emerge soon
GBPAUD is continuing its downward move with the bears appearing determined to recover a good part of the losses incurred during the September 2022-August 2023 uptrend. GBPAUD has cleared a crucial region, but it is now approaching a critical area that could determine the next leg.
In the meantime, the momentum indicators are clearly supportive of the bears’ determination. The RSI is hovering at its lowest point since the September 2022 downleg, while the Average Directional Movement Index (ADX) trades at its highest level since March 2022 and thus signaling a very strong bearish trend. Interestingly, the stochastic oscillator remains stuck at the bottom of its oversold territory, where it can stay there for a while before signaling a reversal.
Should the GBPAUD bears feel confident, they would try to overcome the critical 1.8517-1.8724 range, which is populated by the October 11, 2018 high, the 200-day simple moving average (SMA) and the 78.6% Fibonacci retracement of the January 28, 2022 – September 26, 2022 downtrend. If successful, they could have a go at testing the support set by the November 2, 2009 high at 1.8320.
On the flip side, the bulls are probably trying to put a temporary stop at the current bearish leg. They could try to push GBPAUD above the busy 1.9160-1.9220 that is defined by the January 24, 2014 and the January 28, 2022 highs, and the 100-day SMA. They could then try to stage a move towards the busy 1.9521-1.9408 and put a dent on the bears’ current momentum.
To conclude, GBPAUD bears are firmly in control and are looking for an even more aggressive downleg. However, the bears are probably setting up their defence.
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