GBPAUD rallies have gone above 7SMA but remained well below 21SMA, for now, upside potential is seen only above 21DMA.
In major trend, you could observe the dips of this pair have consistently been fallen below 21SMA on weekly terms, expect more slumps as no traces of recoveries.
After 5 consecutive months of price declines, November series has seen a slight price jump that should not be deemed as the reversals, we see no reasonable substantiations from any other technical indicators, so don’t get trapped as the bears may extend slumps.
As the pair has now slid below EMAs again, we see bears lining up at this level ahead of upcoming RBA’s that is likely to stay pat.
While both leading and lagging indicators are suggestive of continuation.
The oscillator has reached oversold region and still been popping up with selling pressures on both weekly and monthly plotting, the attempts of %K crossover are not convincing while is slightly the bears’ favor.
Don’t get puzzled by weekly , although price bounces above, with crossover has remained below zero levels on the monthly chart, the crossover on weekly could be as the lagging indicator is still in trajectory, so the major downtrend likely to prolong.
On a broader perspective, the pair has now created a new environment as it has consistently remained below 21-month exponential moving averages from the last couple of months or so.
Bears can load weights in shorts as the selling momentum is intensified by leading oscillators with mammoth volumes last week.
Hence, we expect the multi-months lows to extend below 1.5840 levels in the weeks to come.
So we encourage shorts in mid-month contracts for the 1st target of 1.6492 which is next strong support and upon breach of this level once can also look forward the 2nd target at 1.5915 by expiration but strict stop loss should be maintained at 1.70 levels.