- Bullish RSI divergence assisted GBPAUD to find decent support ahead of 1.7900 handle.
- Short-term technical set-up supports prospects for an extension of the ongoing recovery.
- Bulls might confront a stiff resistance near the top end of a descending trend-channel.
It’s Throwback Thursday and time to revisit our bearish GBPAUD call on June 11 & 16. As was anticipated the pair prolonged the recent bearish trend and broke below the key 1.8000 key psychological mark. The pair subsequently dived to the lowest level since September 2019 on June 23, albeit the occurrence of bullish RSI divergence on the daily chart helped it to find decent support ahead of the 1.7900 handle amid oversold conditions.
The mentioned level coincided with the lower end of a short-term descending trend-channel extending from June 12 and should now act as a strong base for the pair. Meanwhile, oscillators on hourly charts have just started moving into the positive territory and support prospects for further near-term recovery. However, RSI and MACD indicators on the daily chart have just managed to recover from the oversold territory but are yet to register any meaningful recovery.
Hence, any subsequent positive move is more likely to face stiff resistance, rather fizzle out near the trend-channel resistance, currently near the 1.8200-1.8210 region.