GBPAUD Bullish Divergence on RSI may stop the selling

FX_IDC:GBPAUD   British Pound / Australian Dollar
The GBPAUD pair has been declining after the January 28 Lower High on the multi-year Channel Down. As long as the 1D MA50 (blue trend-line) is holding as Resistance, this bearish sentiment should continue to dominate. During the last Lower Low leg in July 2020, when the 1D MA50 broke to the upside, the selling stopped and GBPAUD turned sideways on a neutral price action.

Before that, the first sign to warn of this change in trend was the bullish divergence on the 1D RSI , which was on Higher Lows while the price action was on Lower Lows. We suggest to keep selling only if the Diverging Lower Lows trend-line breaks (dashed line) and target the -0.5 Fibonacci extension (orange trend-line). Until then, wait for the 1W MACD to make a Bullish Cross and buy. If that takes place above the Diverging Lower Lows line, target the 0.786 Fib retracement level within the Channel Down (blue). If it takes below the Diverging Lower Lows, target 1.77000.


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