Friday, August 23, 2019
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Technical Analysis – GBP/AUD forms a double top

GBP/AUD has been in a congestion zone since mid-February, in what has started to look like a double top formation. The price, however, needs to break below the neckline positioned around 1.8095 to confirm the bearish pattern but with Stochastics warning over an oversold market, such a move may come with a delay.

The 200-day simple moving average (SMA) currently at 1.8175 could halt downside movements ahead of the neckline. Crossing under the 1.8085 support area, the sell-off could turn more aggressive, with the bears probably targeting the 1.7980 number next.

Should the market change direction to the upside, resistance could initially emerge between 1.83-1.8340. Even higher, a rally above the Ichimoku cloud and more importantly above the strong barrier of 1.8520 could extend upside momentum.

Meanwhile, in the medium-term picture, the pair remains neutral as long as it trades within the 1.8860-1-8085 region. The negative slope in the 50-day SMA reduces chances for a more positive outlook.

In brief, GBP/AUD looks bearish and oversold in the short-term, while in the medium-term it holds a neutral profile.


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Disclaimer:
This information is not considered as investment advice or investment recommendation but instead a marketing communication. This material has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.


Source: XM

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