It’s been almost the 6th week that the rallies are persisting and have gone above 7EMA levels, more upside potential is foreseen upon breach above 21DMA.
After 5-6 consecutive weeks of price rallies, today slight pressure is sensed at 21EMAs, these price jumps should not be deemed as the reversals, but if these sentiments sustain the maximum upto 1.7166 and 1.7306 levels is possible.
The and oscillators on weekly are indicative short-term bulls’ favor but we alert long-term foreign traders “never buck the major trend”.
Although price bounces above, with crossover has remained below zero levels on weekly chart which is trajectory, so the major downtrend likely to prolong.
Bulls hold strong support at 1.6090 in major trend, more rallies likely upto 23.6% Fibos, but the major trend still seems to be intact.
On the contrary, no traces of bounce back in GBPAUD on this timeframe bears likely to head towards deep tunnels as both laggers and leaders still stimulate the momentum in the months to come, so, we reckon AUD bulls against sterling will have an added advantage in the major trend.
For ongoing rallies, we see no reasonable substantiations from any other technical indicators on the monthly graph, so don’t get trapped as the bears may extend slumps.
The price declines have consistently been remained well below on monthly terms, expect more slumps as no traces of recoveries.
Monthly , the lagging indicator also confirms the downtrend continuation.
Additionally, we see bears of this pair lining up at this level ahead of forthcoming RBA’s which is likely to stand pat, while EU-27 transitional negotiations continue to add pressures on GBP.
So it is advisable to stay short in mid-month contracts for the 1st target of 1.6389 which is next strong support (7SMA) and upon breach of this level once can also look forward to hit the 2nd target at 1.5885 by expiration but strict stop loss should be maintained at 1.7166 levels.