Technical Analysis – GBPAUD squeezed between key boundaries
September 16, 2022 11:29 amVideo
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GBPAUD has been in a range for three weeks now beneath the support-turned-resistance line, which joins all the lows from September 2020, struggling to sustain any strength above 1.7100.
The narrowing Bollinger band lines signal potentially increased volatility ahead, though the momentum indicators are providing little direction about the next move in the price as the RSI has pulled lower after failing to overcome its 50 neutral mark, whereas the MACD continues to gain ground above its red signal line.
Encouragingly, the price continues to trade above the 20-day simple moving average (SMA) at 1.7000 and within the upper bullish Bollinger area. Hence, if the pair secures a foothold here, it may attempt to crawl up to the 50-day SMA at 1.7222. Above that, the price may halt near the 1.7346 barrier before meeting the 1.7500 handle. For an outlook upgrade, however, the bulls will need to successfully violate the ceiling at 1.7817 and speed above the 200-day SMA.
In the bearish scenario, where the price closes below the 20-day SMA at 1.7000, it would be interesting to see if downside pressures are strong enough to re-activate the downtrend below the five-year low of 1.6870 and stretch it towards the 1.6683 restrictive zone from 2017.
In brief, GBPAUD is sending confusing signals as the horizontal move below a key constraining line continues. Hence, traders may remain patient until the price jumps above 1.7089 or tumbles below 1.7012 in the coming sessions.
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