GBPAUD turned overbought near a fresh 3 ½-year high of 1.9750 last week, with the price drifting south along with the RSI and the MACD, which signal a bearish bias for the short-term in the four-hour chart.
The price itself is providing negative signals too as it is currently trying to close below the 50-period simple moving average (SMA) and the 38.2% Fibonacci of the 1.8550-1.9750 upleg after breaching the supportive 20-period SMA.
Should the sell-off continue, the 50% Fibonacci of 1.9200 should be the next level to watch given the area’s supportive reaction last week. Falling below the former 1.9150 mark, the door would open for the 1.9100-1.9037 region which includes the 61.8% Fibonacci and the 200-period SMA.
Alternatively, a rebound above the 50-period SMA and the 38.2% Fibonacci of 1.9330 could encourage more buying probably towards 1.9440. Higher, the price may need to surpass the 20-period SMA and the 1.9521 barrier to extend the rally until the next key obstacle seen around 1.9626. Above the latter, all eyes will shift to the 3 ½-year high of 1.9750.
Meanwhile in the broader picture, the positive outlook has changed to neutral after the drop below the previous high of 1.9521. However, confidence in the market’s six-month old uptrend remains in place as long as the ascending trendline since July 30 keeps holding.
In brief, the short-term outlook for GBPAUD is bearish, while in the bigger picture, although the view has turned neutral, the upward pattern has not lost its long-term attractiveness yet thanks to the ascending trendline.
