The British pound appears to have weakened following the release of the Retail Sales MoM data. As a result, the GBPAUD pair has experienced a stronger dip below key technical levels. At this point, traders may begin to recalculate their positions. Let’s take a more detailed look at the pair below.
Key Levels
Resistance: 2.050, 2.100, 2.150
Support: 2.000, 1.950, 1.900
GBPAUD Bears Show Massive Strength
While the GBPAUD market edged higher for most of the previous week, one strong bearish move wiped out the majority of the recorded gains. This caused the pair to close heavily in the red.
In addition, the last price candle on the chart has retracted back below the 9-day Exponential Moving Average (EMA) curve. Meanwhile, the Stochastic Relative Strength Index (SRSI) indicator lines remain generally projected upward. However, a closer look at the lead line reveals a deflection, suggesting that the market may continue along its bearish path.
GBPAUD Heads Deeper into Bearish Territory
On the GBPAUD 4-hour chart, it is clear that price action has resumed a bearish trajectory. Over the last three price candles, the pair has recoiled off the ceiling formed by the 9-day EMA curve.
Likewise, the SRSI indicator lines are now positioned deep in the oversold region, below the 10 mark of the indicator. Although the lead line shows a sideways deflection, the general trajectory remains downward. Furthermore, the size of the last price candle on the pair’s chart indicates that bears hold significant strength. Therefore, this may drive the market toward the 2.020 price level.
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