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Technical Analysis – GBPAUD bears want more but decisive support levels stand in their way
June 8, 2023 10:25 amVideo
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GBPAUD is trading a tad below the busy 1.8701-1.8724 area, a sizeable correction following the April 28, 2023 high of 1.9034. This was the highest print for almost 15 months, with the pair also recording an impressive 18% increase since the September 26, 2022 low of 1.5937. The bears have a long way to go before declaring a short victory especially as the September 26, 2022 upward trendline awaits them a tad below the current levels.
The overall technical picture is somewhat supportive of the bears’ intentions, especially when examining the momentum indicators. The Average Directional Movement Index (ADX) is hovering around its 25-threshold and the RSI is trying to remain below its 50-midpoint. Interestingly, the stochastic oscillator has made a lower low and it is aggressively moving in a vertical fashion towards its oversold area. This could be seen as a signal that the bearish pressure remains in place.
If the bears feel inspired by the above messages, they would come up against the support set by the September 26, 2022 upward trendline and the 78.6% Fibonacci retracement of the January 29, 2022 – September 26, 2022 downtrend at 1.8517. Lower, the key 1.8262-1.8414 range could really test the bears’ determination.
Should the GBPAUD bulls try to recapture the market reins, they would quickly aim to break the 1.8701-1.8724 range defined by the October 1, 2018 high and the 50-day simple moving average (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. This is populated by the January 14, 2014 and January 28, 2022 highs respectively.
To sum up, GBPAUD bulls’ confidence has taken a considerable hit. However, they need to keep the pair above the 1.8517 area in order to avoid an even stronger correction.
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