GBP/AUD has cratered from its late September 1.8961 highs. But any onward decline runs into a layer of robust support broadly in the 1.8304-1.8235 patch, Benjamin Wong, Strategists at DBS Bank, reports.

Prior overbought indicators are waning

“The bearish divergences spotted on the technical indicators oiled the decline. However, the same set of indicators are now hinting of a likely turnaround in the cross’ fortunes.”

“The 200-DMA at 1.8304 lurks just below recent 1.8417 lows, and in its proximity also rests the support offered by the 61.8% Fibonacci retracement of the 1.9154-1.7741 range grip that calibrates 1.8281. Both of these levels are buffered by 50-week and 200-week moving averages at 1.8235 and 1.8282, respectively. Hence, there is a layer of support coming into the 1.8304-1.8235 zone.”

“A further decline is also likely to be tempered by the congestion zone we saw going through in June. That approximates and has barricaded a 1.82-1.85 support range, but of interest to us is where it runs into the trend support arising from 1.7417 lows. That axes 1.8330, while itself the trendline support is in a cradle position with 200-dma at 1.8304.”