The GBPAUD has seen the price rotate down today after making new highs for the month (going back to July 30th). The move to new highs also moved above the 50% of the move down from the July 25 high to the August 7th low. That level came in at the 1.4967 level (see chart above). The price extended to 1.4989 before sellers increased their selling pressure.
The low so far today has extended below the trend line support but only by a small amount. The 100 hour MA (blue line in the chart below), is a key target for the pair now at the 1.4880 level currently. The question now is can the price decline continue toward that 100 hour MA target?
Looking at the 5 minute chart below, the price has bottomed at the 1.4920 level so far. The correction off that low has extended to the 1.4945 level, just short of the 38.2% of the days trading range and also the close from yesterday’s trading at 1.4946. If the price can stay/close below this level today, and the bears/sellers remain in control of at least the shorter term bias. If the price moves back above, the momentum from the decline today may be fading (watch 1.4954 as well).
Looking at the daily chart, the longer term trend is down but there is pause for concern. The price yesterday closed above trend line resistance (currently at 1.4902). Such a move should solicit more buying. It did initially, but the subsequent price decline has been moved the price back below the close from yesterday. This puts into question the buyers strength. If the price is able to break below this trend line going forward, it should disappoint the breakout buyers. At which point, I would expect traders to start to treat the market as a consolidating with a bearish bias.
