Strong bearish formation in GBP/AUD
The price of GBP/AUD broke below significant support on Friday on the daily chart, suggesting that the bearish move which started on May 23rd may accelerate its move downwards. Price action broke below support polarity extending from beginning of April on Friday. A close below this support line should accelerate declines, first towards the 50% Fibonacci retracement of the February low to May high move by 1.5360 and lower towards April lows by 1.5260.
To confirm our bearish bias, the 15-day moving average has cut the 50-day moving average from above and yesterday, the price closed below the 38.2% Fibonacci level by 1.5551. On the RSI (14) we are currently around the 35 level, and a break below the 30 barrier is further confirmation of a strong bearish bias.
We need a close below the support polarity line, by 1.5525 areas, to confirm this downside move. Failure to close below this level may give scope for a reversal from this bearish trend. To the upside, initial resistance is found by the bear trend line off the highs of this downward move and by the 1.5700 area.
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