GBPAUD Reacts to Lower-Than-Expected Retail Sales

While the Australian dollar remains quiet on the fundamentals front, the British pound is reacting to disappointing retail sales data. This has reinforced resistance above the GBPAUD market, causing price action to rebound downward.

Key Levels

Resistance: 2.0300, 2.0500, 2.0700

Support: 2.0000, 1.9800, 1.9500

GBPAUD Has Some Cushion

Although the GBPAUD market has pulled back for the second consecutive session, price action remains above key technical levels. The most recent price candle is red and is hovering above the 9-day Exponential Moving Average EMA.

At the same time, the Stochastic Relative Strength Index SRSI indicator lines remain above the 90 level and are converging. However, price action is still holding above the 9-day EMA, and the SRSI has not yet produced a bearish crossover.

GBPAUD Cushion May Hold

On the 4-hour chart, price action appears to be attempting to stabilize. While this movement may simply be short-term noise, the latest price candle is green but strongly compressed to the downside. It has also pushed the pair slightly below the 9-day EMA.

Nevertheless, price remains above the nearest psychological support at the 2.0200 level. Meanwhile, the SRSI indicator lines continue to decline toward the oversold region.

If price action manages to reclaim the 9-day EMA, the market may retest the 2.0300 resistance level. Otherwise, a break below the 2.0200 support could open the way for further downside.

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