GBPAUD has eased slightly from last Thursday’s 40-month high of 1.9968 as the positive momentum has started to lose steam somewhat. For the moment, the RSI and stochastic oscillator are holding in the overbought region. The former has flatlined just above 70, however, for the latter, the fast moving %K line has crossed below the slow moving %D line, signalling a possible pullback.

Should the downside pressures intensify, the pair could initially retreat towards 1.9550, which has previously acted as both support and resistance, before targeting the 20-day simple moving average (SMA) at 1.9467. The next stop could be the 50-day SMA at 1.9185 just above the ascending trendline, while even lower, the 161.8% Fibonacci extension of the December 2022-February 2023 downleg at 1.8920 could prevent a deeper slide.

Alternatively, if GBPAUD maintains its bullish bias in the short term, there’s likely to be a major battle in the 2.0000 region as the 261.8% Fibonacci extension of 1.9970 capped the latest advance last week. Successfully clearing this hurdle would open the way for the 300% Fibonacci extension of 2.0371. Further up, the March 2020 peak of 2.0845 could stymie the rally.

In brief, the picture for GBPAUD is looking positive in both the short and medium terms. A climb above the 261.8% Fibonacci would reinforce the bullish structure, which is unlikely to come under threat unless there is a drop below the 50-day SMA.