GBP/AUD Breaks Below Key Support Zone
JFD Team | Oct 20, 2021 07:21AM ET
GBP/AUD traded lower on Wednesday, breaking below 1.8423, a critical level that supported the price action on Friday and yesterday. Overall, the pair continues to print lower highs and lower lows below the downside resistance line taken from the high of Sept. 20, so we would consider the short-term outlook negative.
The move below 1.8423 has confirmed a forthcoming lower low, and the pair could head towards 1.8357, marked by the low of July 7. If the bears stay in charge, we could see the pair head towards the low of the day before, 1.8253.
h2 Bearish View/h2Shifting attention to our short-term oscillators, we see that the RSI turned down after hitting resistance at its 50 line and now looks to be headed towards the 70 line. While the MACD lies below both its zero and trigger lines, pointing down. Both indicators detect downside speed.
h2 Bullish View/h2We would like to see a clear recovery back above 1.8612, which is the peak of Oct. 18, before we start examining the case of a bullish reversal. This will confirm the break above the downside line and ensure a forthcoming higher high on 4-hour and daily charts.
The buyers may soon touch the peak of Oct. 8, at 1.8672, where another break could carry more bullish implications, perhaps towards the high of Oct. 6, at 1.8765.
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