- Daily Ichimoku cloud offers strong support to GBP/AUD, we see weakness only on break below.
- The pair is currently extending bounce off cloud top, intraday bias higher.
- Technical studies are turning bullish. RSI has turned higher and Stochs have rolled over from oversold levels.
- We see scope for test of 20-DMA at 1.7472. Breakout there could see further upside.
- Sterling showed muted reaction to UK manufacturing PMI which eased more than expected.
- Focus now on UK markit construction PMI data for further impetus.
- 20W SMA at 1.7073 is next major support below daily cloud, break below will accentuate weakness.
- Scope then for test of 1.6863 (61.8% Fib retracement of 1.61625 to 1.79966 rally).
Support levels - 1.7314 (5-DMA), 1.7318 (cloud top), 1.7079 (20W SMA), 1.6895 (Nov 2 low), 1.6863 (61.8% Fib retrace of 1.61625 to 1.80 rally)
Resistance levels - 1.7404 (50-DMA), 1.7472 (20-DMA), 1.7492 (June 1 high)
Recommendation: Go long on break above 50-DMA, target 20-DMA at 1.7472.
FxWirePro Currency Strength Index: FxWirePro's Hourly GBP Spot Index was at 96.2758 (Bullish), while Hourly AUD Spot Index was at 2.06746 (Neutral) at 0520 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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