GBP/AUD rebounded after hitting a three-month low of 1.7473 on Friday. It is currently trading around 200 pips above the aforementioned trough.
Despite recovering somewhat, the pair continues to look mostly bearish in the short term, something which is also supported by the negatively aligned Tenkan- and Kijun-sen lines. Notice though that the %K and %D lines of the stochastic oscillator have just recorded a bullish cross, which may constitute an early sign for gains in the very short term.
An extension of the recovery may see the pair finding resistance around 1.7770, the current level of the Tenkan-sen. Not far above, a barrier to gains could come around 1.7832, the 61.8% Fibonacci retracement level of the up-leg from 1.7282 to 1.8724. Higher still, the focus would turn to the current level of the 100-day moving average line at 1.7934.
Should the pair re-enter a path of declines, immediate support could occur around the 76.4% Fibonacci mark at 1.7621. Steeper losses would eye last week’s three-month low of 1.7473 for additional support, while lower still, a previous bottom at 1.7390 would come into scope.
The medium-term picture continues to look predominantly bearish, with trading activity taking place below the 50- and 100-day MA, as well as below the Ichimoku cloud.
To conclude, the short- and medium-term outlooks look negative at the moment, though some advances in the very short term are not to be ruled out.
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