GBP/AUD recovers near 1.8300; indicators signal bullish actions.
GBP/AUD turned higher after it touched a new two-month low of 1.8100 last Wednesday, sending prices above the 38.2% Fibonacci retracement level of the up leg from 1.7220 to 1.8860, around 1.8195. The RSI is turning slightly higher approaching the 50 level, while the stochastic seems to be strongly bullish as the %K line and the %D line completed a positive cross in the oversold zone.
On the upside, immediate resistance could come around the 20-day simple moving average (SMA) currently at 1.8320 while next the price could flirt with the 23.6% Fibonacci of 1.8470, which coincides with the 40-day SMA. Higher still, the 1.8730 resistance could attract traders’ attention.
On the other hand, significant declines below the two-month low may meet support near the 50.0% Fibonacci of 1.8035 but the pair first needs to penetrate the 1.8100 psychological level. Below that, the 1.7990 support could come into focus.
Overall, GBP/AUD seems to be in negative correction following the pullback on the 33-month high of 1.8860. If the price remains below the short-term SMAs, investors could turn their interest to the downside. However, the latest action and the technical indicators suggest an upside rally.
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