GBPAUD is moving sideways recently, finding support at the 1.7600 major psychological level and resistance at 1.7900. Price is halfway through its bounce to the top of the range, hitting some short-term resistance at the current area of interest.
Stochastic is already indicating overbought conditions, which means that buyers are feeling exhausted. If sellers take over, another move to the range support could be underway.
However, the 100 SMA is still above the longer-term 200 SMA to signal that the path of least resistance is to the upside. This means that the rally is more likely to resume than to reverse, but the gap is narrowing to signal slowing buying pressure.
Economic data from Australia has been mostly weaker than expected in the previous week but data from its top trade partner, China, has been upbeat. This could mean stronger appetite for raw material commodities down the line, which could prop up the Australian economy.
There are no major reports from both Australia and the UK today and for the rest of the week, which suggests that the range would likely hold. Keep in mind, however, that the pound could still be very sensitive to Brexit-related updates while the Aussie could be pushed around by overall market sentiment.
By Kate Curtis from Trader’s Way