GBPAUD Fiercely Exits Range Area after a Year

Technical analysis of Forex market

GBPAUD knocked the wall around 1.8525 to fiercely exit the one-year-old range area and peak at a 14-month high of 1.8924 on Wednesday.

Having snapped the 38.2% Fibonacci retracement of the 2020 massive sell-off (2.0845 – 1.7413), the pair could head for the 50% Fibonacci of 1.9125. Yet, some choppy trading would not be surprising in the near term as the RSI and the Stochastics are currently fluctuating in the overbought territory, making any price declines possible.

Beyond the 1.9125 barrier, the rally could take a breather near May’s 2020 high of 1.9520 before stretching towards the 61.8% Fibonacci of 1.9750.

In the bearish scenario, should the nearby 1.8823 support area collapse, the price could seek shelter near the 38.2% Fibonacci of 1.8724. Then, the 20-day simple moving average (SMA) and the dashed ascending trendline, currently around 1.8650, could guarantee sharper declines towards the 50-day SMA and the tentative ascending trendline at 1.8500.

Summarizing, GBPAUD’s risk is expected to remain cautiously tilted to the upside in the short term, with resistance likely coming next around 1.9125.