Pound Holds the High Ground as Aussie Struggles—GBPAUD Tests Bullish Resolve Amid Weak Aussie Data

Summary

• Moving Averages Signal Uptrend:
• GBPAUD remains bullish, trading above the 50-day SMA (2.0762) and 200-day SMA (2.0001). This alignment supports continued upward bias.
• Momentum Lacks Conviction:
  • RSI at 57.49 suggests neutral-to-bullish conditions.
  • MACD remains slightly positive (0.0037), reinforcing mild bullish sentiment.
  • ADX at 11.22 reflects low trend strength, meaning momentum is not yet robust enough to confirm a breakout.
• Bearish Harmonic in Play:
• A bearish harmonic pattern is emerging on the 4-hour chart, with a critical support level at 2.09227.
• A break below this may open a path toward 2.08760 and further down to 2.08435, potentially triggering a short-term correction.

Fundamental Drivers

UK Economy: Sturdy but Uneven

• The UK economy has outperformed expectations, supported by a surprise upside in GDP data.
• However, global macro uncertainty and mixed domestic signals cloud the pound's long-term trajectory.

Australia: Growth Slows, Cuts Loom

• With growth pegged at 1.2% this year, the Aussie faces headwinds from tight monetary policy and lagging consumer spending.
• The RBA's expected rate cut in November further pressures the AUD as policymakers shift toward a more accommodative stance.

Short-Term Outlook

GBPAUD is trading within a structurally bullish setup, bolstered by a stronger UK outlook and weakness in the Australian economy. However, technical caution is warranted due to the emerging bearish harmonic and weak trend momentum indicators.

Suppose 2.09227 breaks, and expect a possible pullback to 2.08435. On the upside, holding above this level and reclaiming higher resistance could reignite bullish momentum. Watch closely for UK inflation data and RBA commentary as potential catalysts in the coming sessions.

GBPAUD – H4 Timeframe

The double bullish break of structure on the 4-hour timeframe chart of GBPAUD is the first sign of a bullish intent, backed by support from the 100—and 200-period moving averages. The bullish SBR pattern adds an extra confluence to the bullish sentiment and provides a drop-base-rally demand zone as the point of interest for the buy entry.

Analyst's Expectations: 

Direction: Bullish

Target- 2.10345

Invalidation- 2.07482

CONCLUSION

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