GBPAUD Bears Take A Breather At The Bottom Of A Tight Channel

Technical analysis of Forex market

GBPAUD strengthened its negative momentum within a narrow descending channel and touched a 1½-year low at 1.8053 this week after tumbling below the 1.8500 mark.

With the price currently consolidating near the bottom of the channel, and the RSI and the stochastics fluctuating in oversold zone, an upturn is increasingly likely in the near term. Yet, that may depend on how strong the 1.8050 support is. If it fails to reject downside movements, the market could find new sellers to drove the price towards the next key barrier of 1.7788. Beneath 1.7667, the 2019 trough of 1.7558 could let the bears test the 1.7430 barrier if it proves easy to pierce, also downgrading the overall picture to a bearish one.

On the flip side, a rebound near 1.8050 could stall somewhere between the 1.8500 level and the upper surface of the channel, with the 20-day simple moving average (SMA) within the area also stealing some attention. Then, should the pair close decisively above 1.8650, the rally is expected to gear towards 1.9040 and the 200-day SMA in an attempt to eliminate concerns of a down-trending market.

– advertisement –

In brief, GBPAUD bears could seek new lows below the 1.8050 support level, though any downside move should be carefully treated as the pair seems to be trading in oversold waters.