GBP/AUD traded lower during the Asian morning today, but hit support at 1.9220, slightly above the upside support line drawn from the low of January 14th, and during the European morning, it rebounded. As long as the rate continues to trade above that line, we would consider the near-term outlook to be cautiously bullish. However, we would like to see the rate violating some key resistance barriers before we get more confident on larger upside extensions.
We prefer to wait for, not only a break above 1.9415, but also above the 1.9465 hurdle, which is marked as a resistance by an intraday swing low formed on January 30th. Such a move may allow the bulls to target the 1.9545 barrier, marked by the high of that day, the break of which may carry larger bullish implications, perhaps paving the way towards the peak of January 31st, at around 1.9750.
Shifting attention to our short-term oscillators, we see that the RSI rebounded and just poked its nose back above its 50 line, while the MACD, although negative, lies above its trigger line and points up. It could obtain a positive sign soon. Both indicators suggest that the rate may start picking up upside speed soon, which is in support of the aforementioned scenario.
Now, in order to start examining whether the bulls have decided to take another break, we would like to see a dip below 1.9165. Such a move may allow the bears to push towards the 1.9095 zone, defined as a support by the lows of January 23rd and 24th. Another break, below 1.9095, may extend the slide towards the 1.8980 zone, or towards another upside line, taken from the low of December 23rd.
