GBP/AUD Bullish Channel Support at 1.8000

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GBPAUD is trending higher on its 4-hour chart, with price cruising inside a rising channel. The pair is closing in on the channel support and might be due for another bounce.

The 100 SMA is above the 200 SMA to indicate that the path of least resistance is to the upside or that the climb is more likely to resume than to reverse. Price is finding support at the 100 SMA dynamic inflection point but might still dip to the channel bottom that coincides with the 200 SMA dynamic support.

The Fibonacci tool shows that price is right on the 50% Fib level while the 61.8% Fib is closer to the 1.8000 major psychological support and channel bottom. If any of these are able to keep losses in check, GBPAUD could recover to the swing high or channel top around 1.8300.

Stochastic is already turning higher from the oversold region to signal that buyers are ready to return while sellers take a break. RSI is also pulling up without reaching the oversold area, suggesting that bulls are eager to take over.

There are no major reports due from the UK economy this week, but the pound has been drawing support from the plan to ease lockdown restrictions. This could mean a strong rebound in business and consumer activity soon, which would then shore up overall growth and possibly spur rate hike expectations.

Recall that the BOE has dismissed the notion of negative interest rates, citing that there have been green shoots in the UK economy already. Meanwhile, the RBA kept rates on hold in their latest policy statement and also noted that the recovery is going well.

Risk appetite might also favor the higher-yielding Aussie as traders focus on vaccine rollout efforts all over the globe, as well as stimulus programs from governments.

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