GBPAUD has made impressive gains of almost 8% in the past three weeks with the rally coming to a pause at 1.9736 on Tuesday. The pair has retraced around 33.5% of the long-term downtrend that started in August 2015 and almost 61.8% of the latest downleg from 2.0662 to 1.8292.
The 61.8% Fibonacci retracement level is acting as a resistance level around 1.9750. Momentum indicators such as the RSI and the MACD remain strongly bullish so further gains are possible in the near term. A break above the 61.8% Fibonacci level would strengthen the current upside momentum and put the pair within closer reach of the 200-day moving average. If prices are unable to rise above the 200-day moving average, the longer-term outlook would likely remain neutral to bearish.
The 100-day moving average has been providing support to prices in recent days. A drop below it would open the way towards the 50% Fibonacci level at 1.9475 and then the 38.2% Fibonacci level at 1.9195. Failure to hold above the 38.2% Fibonacci level could shift the bias back to negative.
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