GBPAUD has declined considerably after touching a two-year high of 1.8507 in late March. During Thursday’s trading, it posted a four-month low of 1.7516, while it is currently not far above that nadir.
The negatively aligned Tenkan- and Kijun-sen lines serve as a testament to the negative short-term momentum that is in place. The Chikou Span, though, is signaling a potentially oversold market; a near-term reversal should thus not be ruled out.
Immediate support to further declines may be taking place around the 1.75 round figure, while the 1.74 handle could provide additional support in case of steeper losses.
A move to the upside may meet resistance around 1.7598, this being a bottom recorded on March 12, with the area around it also encapsulating the 1.76 handle. The region around the current level of the Tenkan-sen at 1.7723 could act as an additional barrier in case of stronger bullish movement.
The medium-term picture is looking predominantly bearish at the moment, with price action taking place below the 50- and 100-day moving average lines, as well as below the Ichimoku cloud.
Overall, both the short- and medium-term outlooks are currently looking bearish, though caution is warranted in the near-term as there are signs of an oversold market.
