GBPAUD has been making higher highs over the last number of months. In the short-term, the market seems to have lost direction after the pair touched a 1 ½-year peak of 1.7997 on February 8 and now the technical indicators suggest the continuation of the consolidation phase.
The Relative Strength Index (RSI) is moving sideways above 50. The red Tenkan-sen line has been flat the past two days above the blue Kijun-sen line which has also no specific direction, indicating a trendless situation in the short-term. The 20-day simple moving average (SMA) is turning flatter, sending further neutral signals.
However, if the market manages to expand to the north, the 23.6% Fibonacci of 1.7780 of the upleg from 1.7096 to 1.7997 could offer nearby resistance ahead of attention shifting to the previous top of 1.7997. Further above, the extension of the recent rally could reach the area between 1.8100-1.8300.
On the flip side, a decline could meet support around the 38.2% Fibonacci at 1.7650, including the 20-day moving average at 0.7710 which was violated on the way up earlier the day and could instead provide support. Steeper losses leading to a close below the 50% Fibonacci of 1.7542 and more importantly under the 50-day SMA of 1.7488 would increase the odds for the pair to plunge to 0.7434 (61.8% Fibonacci).
Looking at the medium-term picture, the market is looking neutral-to- bullish given its performance the past three months. Moreover, as far as prices hold above the 50-day SMA and the golden cross between the 50- and the 200-day SMA remains in place, the odds for a trend reversal are looking smaller.
