GBPAUD Makes a U-turn after 1-Year Low

Technical analysis of Forex market

GBPAUD made U-turn after printing a bullish hammer candle near a one-year low of 1.7693 last week.

Since then, the price managed to take the 20- and 50-day simple moving averages (SMAs) out of its way, switching the short-term bias to a positive one. The positive momentum in the RSI, which is accelerating above its 50 neutral mark, and the strengthening MACD are also reflecting a growing buying appetite.

A close above 1.8377, which is the 23.6% Fibonacci of the downleg from 2.0591 to 1.7693, could add more fuel to the rally, pushing the price towards the 1.8652-1.8800 restrictive region. Higher, a cross above the 200-day SMA and the 50% Fibonacci of 1.9142 could be a bigger achievement.

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On the flip side, a pullback below the SMAs would expose the pair to the one-year low of 1.7693. Note that the price has bottomed three times within this area since early 2019, hence any violation could generate a more aggressive sell-off, potentially towards the 1.7285 support.

Meanwhile in the medium-term picture, the pair maintains a bearish trajectory and only a rally above 1.8377 could change that to neutral.

In short, GBPAUD could maintain a bullish attitude in the short term, probably gaining fresh momentum above 1.8377.