GBPAUD recently broke below its rising trend line support visible on the daily chart, which means that a long-term reversal from the uptrend is due.

Price might need to pull back to the broken support, which might now hold as resistance, before heading further south. The 50% Fibonacci retracement level lines up with the former trend line around 1.9800 and the 100 SMA dynamic inflection point.

The 100 SMA is above the 200 SMA to indicate that the path of least resistance is to the upside or that there’s still a chance for the uptrend to resume. The gap between the moving averages is also widening to reflect strengthening bullish momentum. The 200 SMA recently held as dynamic support as well.

RSI is pulling higher after its recent dip to the oversold region, which suggests that bullish pressure could return. Stochastic is also heading north, so price could keep following suit until overbought conditions are met.

Sterling has taken a hit for the UK government’s slow response to the coronavirus outbreak, which is in stark contrast to that of Australia. The latter is already starting to ease some lockdown measures, which could mean a return to normal for its economy soon.

The RBA refrained from cutting interest rates in this week’s rate statement while some are expecting more dovishness from the BOE. No actual changes to monetary policy are expected for now, but keeping the door open for stimulus could mean more losses for the pound.

Then again, the Aussie could take some hits from fresh tensions between the US and China, which could spur another trade spat and hurt demand for commodity exports. Apart from that, overall risk sentiment could also take some cues from US jobs data due later in the week. Leading indicators due until then could also spark short-term volatility for higher-yielding currencies.