GBPAUD continues to trend higher as it broke past the resistance around 1.7700 and reached the 1.8050 minor psychological mark. However, sellers jumped in at this area while buyers booked profits, leading to a pullback.

Price is currently testing the 50% retracement level, which already seems to have held as support. If so, price could revisit the swing high or move higher to the 1.8100 mark and beyond. A larger correction, on the other hand, could lead to a dip to the 61.8% Fib at 1.7725 or the area of interest closer to the rising trend line since mid-August.

The 100 SMA is just crossing above the longer-term 200 SMA to confirm that the path of least resistance is to the upside. This means that the uptrend is more likely to carry on than to reverse. Also, these moving averages are situated right at the area of interest, adding to its strength as support. A break below this region could lead to a reversal from the climb.

RSI is hovering around middle ground to signal that range-bound conditions could be in the cards. Stochastic has recently climbed out of oversold territory to signal that bullish pressure is present and could allow the climb to resume from here.

Brexit talks are still front and center for pound price action, and the currency recently drew support from rumors that the EU could adjust its stance on the Irish border backstop issue. Keep in mind that this is one of the key topics crucial to resulting in a “no deal” outcome, so any sign of concession could revive hopes that an agreement could be struck.

Meanwhile, the Australian dollar has been on the back foot owing to the Westpac hike in variable home loan rates, which lowered the odds of seeing an RBA hike anytime soon. It doesn’t help the Aussie that US-China trade relations are also in focus as another round of tariffs might take effect soon.