Technical Analysis – GBPAUD slips below bearish cross of short-term SMAs

Melina Deltas, XM Investment Research Desk

GBPAUD extended the last four days’ losses and is currently trading not far above a six-week low around the 38.2% Fibonacci retracement level of the upward movement from 1.7220 to 1.8860.

The RSI turned lower after entering the 50 level and it continues to head lower in support of a negative short-term picture. The bias in the very-short-term also looks bearish as indicated by the stochastics: the %K and %D lines are negatively aligned and are both moving further down.

Further declines may meet support near the 38.2% Fibonacci before edging lower towards the 50.0% Fibonacci region of 1.8035. Not far below, support could occur around the 1.7990 hurdle.

On the upside, resistance could come around the 23.6% Fibonacci of 1.8470, while next the price could flirt with the bearish cross within the 20- and 40-simple moving averages (SMAs) currently at 1.8500 in the daily chart. Higher still, the 1.8730 would increasingly come into scope.

The medium-term picture looks predominantly bullish, however, a slip until the 50.0% Fibonacci could change the outlook to a more neutral one.