GBP/AUD recently peaked at 1.9154. The current decline to 1.8679 has tested the 50-day moving average (DMA), delivering a 2.5% decline from the highs. Driving the cross lower is a bearish rising wedge set-up, and the weekly charts hint there remains downside pressure to be captured, Benjamin Wong, Strategist at DBS bank, reports.
Limited upside remains on the table
“The cross has tested Tenkan support at 1.8705 (50-DMA at 1.8712), and the cue from the technical indicator shows if bearish pressures persist, we are just in the early stages of decline.”
“Within the cloud rests the Kijun support at 1.8447 – a move towards this bears a 38.2% Fibonacci retracement of 1.7417-1.9154 (at 1.8490) which covers the rally and latitude of the upside from early January.”
“A bearish rising wedge is driving the cart, and even if prices go sideways, chances are we would be filling the rungs of a potential head-and-shoulders right hand side. Such patterns would provide continuation of bearish pressures. A hazy projection of a neckline break can see the cross move towards late October 2020’s 1.8527 peak”