GBPAUD, Daily
The dollar has been trading firmly so far today. USDJPY edged out a fresh two-month peak at 113.39. EURUSD picked up bids into 1.0900, fueling a rebound to the 1.0920 area and leaving a post-French election low at 1.0902, while AUDUSD fell by over 0.5% in making a fresh four-month low at 0.7335 following a weaker than expected Australian retail sales report for March, with sales tipping 0.1% m/m lower, thwarting the median forecast for a 0.3% m/m rise. Cable traded modestly softer, to sub-1.2950 levels after yesterday logging a seven-month peak at 1.2990.
Weak retail sales data from Australia weighed on forex and equity markets and investors are taking stock while waiting for a catalyst before making further headway. Australian Dollar weakness due to this very poor Retail Sales, was highlighted in many pair crosses, such as with US Dollar and Sterling. Much of an interest for me was firstly GBPAUD, which is trading progressively higher since March 21st. Hence GBPAUD drifted above 1.7600 handle today following morning’s data.
The Daily chart suggests that GBPAUD will continue to be bullish, given the extension of Upper Bollinger Bands. Meanwhile in the 4-hour chart pair broke earlier the upper Bollinger bands making a new high at 1.7640. The RSI is at 75, however the upwards slope suggests that further upwards momentum is likely to continue. The MACD and Parabolic SAR remain positive since late March. In shorter timeframes such as hourly charts the pair seems to present a possible intraday correction of the trend, by going 30 pips down.
Hence Long position was taken in the daily chart, with entry at 1.7612. Support was set at 1.7450, which was a strong support area on Friday and Monday. Target 1 was set at 1.7700 with the help of trendline, while using ATR (14), Target 2 was set at 1.7800.
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Andria Pichidi
Market Analyst
HotForex
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