GBPAUD formed lower highs and lower lows to consolidate inside a falling wedge formation on its 4-hour time frame. Price seems to be finding support at the wedge bottom around 1.8100 and might be due for a bounce to the top.
However, the 100 SMA is below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. This suggests that support is more likely to break than to hold or that resistance is more likely to hold. The 100 SMA also lines up with the top of the wedge to add to its strength as a ceiling. The gap between the moving averages is widening to reflect increasing bearish pressure as well.
RSI is heading higher and has just crossed the center line on its move up. This suggests that bullish momentum could keep building up and taking price to the top of the wedge or higher. A break above the 1.8250 area could be enough to show that bullish momentum has kicked in and that an uptrend of the same height as the wedge might follow.
Stochastic is also heading up to indicate that buyers are regaining the upper hand. This oscillator has plenty of room to climb before reaching the overbought zone, which means that it could take a while before buyers feel exhausted. The wedge spans 1.8100 to around 1.8800 so the resulting breakout could be of the same height.
Sterling seems to have found support off the recent Brexit extension, as well as mostly upbeat data. Meanwhile, the Aussie is being bogged down by the RBA’s openness to ease policy on account of weaker growth expectations.
Australia’s jobs figures recently beat expectations, supporting the idea that the RBA might stay one of the more neutral central banks around, despite trade tensions weighing on commodity demand.