Technical analysis – GBPAUD posts bullish spike at 4-year high

Melina Deltas, XM Investment Research Desk

GBPAUD after the aggressive bullish action towards a four-year high of 2.0763, returned near its opening level on yesterday’s session below 2.0000. However, chances for a downside reversal are minimal, as the 20-day simple moving average (SMA) remains above the 40-day SMA for more than a month now. Additonal evidence comes from the MACD as it continues to strengthen to the upside and above its trigger line, supporting this view, while the RSI is flattening slightly below the 70 level.

Should the price close comfortably above the 23.6% Fibonacci retracement level of 1.7560 – 2.0763 at 2.0010, traders could add more value to the pair, pushing the market up to 2.0500. Even higher the 2.0655 resistance and the four-year high of 2.0763 could attract attention.

Alternatively, in case of a downfall below 1.9835, the pair could meet the 20-day SMA, which stands slightly above the 38.2% Fibonacci of 1.9540. Further down, the price could flirt with the 40-day SMA currently at 1.9400 and the Ichimoku cloud. More downside pressure could test the seven-month rising trend line at 1.9260.

In the bigger picture, GBPAUD is still pointing up, framing a positive profile.