- GBP/AUD testing key slope support- short bias vulnerable near-term while above 1.7617
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GBP/AUD Weekly Price Chart
Technical Outlook: GBP/AUD has been trading within the confines of a well-defined ascending pitchfork formation extending off the 2016 low. Price is now testing slope support (red) and a weekly close below this threshold would risk substantial losses for the pair targeting confluence support at 1.7470/90 (52-week moving average & 38.2% retracement) and the yearly low-week close at 1.7344. Broader bearish invalidation stands at 1.7950- a breach above this region would be needed to suggest a more significant low is in place.
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GBP/AUD Daily Price Chart
Notes: A closer look at GBP/AUD price action highlights today’s test of support at the sliding parallel extending off the September lows with the 61.8% retracement of the June advance just lower at 1.7617- A break / close below this threshold is needed to keep the immediate short bias in play targeting the lower parallel around 1.7470. Look for initial resistance back at the 200-day moving average / weekly open at 1.7717/20 backed by the monthly open / April trendline resistance at ~1.7810.
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Bottom line: GBP/AUD is testing long-term up-trend support. Price has been coiling up for months now and while there’s no immediate play here, we’re looking for a breakout of the 1.7617-1.7810 for further guidance on our medium-term directional bias. From a trading standpoint, the near-term threat remains for an exhaustion low while above 1.7617.
For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy
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Relevant GBP/AUD Economic Data Releases
Economic Calendar - latest economic developments and upcoming event risk
Other Setups in Play
- XAU/USD Price Analysis: Gold Bounces from Fibonacci Support
- EUR/USD Price Analysis: Euro Poised to Break with ECB / US GDP on Tap
- AUD/USD Technical Outlook: Aussie Holds Critical Price Support
- Written by Michael Boutros, Currency Strategist with DailyFX
Follow Michael on Twitter @MBForex or contact him at mboutros@dailyfx.com
