FxWirePro: GBP/AUD correction underway following significant slide, good to sell on rallies

• GBP/AUD gained on Monday   as sterling was boosted by improved risk appetite in global markets, but upside was limited as investor’s awaited debate and vote on the proposed bill.

• The bill will be fiercely debated in the lower house of parliament on Monday and could be approved, but is likely to struggle in the upper house later this week .

• GBP/AUD is likely to remain capped below 1.7842 (61.8% fib) as deadline for a trade agreement approaches with little sign of a compromise.

• Technically, sterling's setup looks bearish with 5, 10 and 21 daily moving averages are falling, while RSI is strongly bearish at 30.

• Immediate resistance is located at 1.7676 (50% fib ), any close above will push the pair towards 1.7735 (5 DMA).

• Strong support is seen at 1.7504 (23.6%fib) and break below could take the pair towards 1.7303 (23.6%fib).

Recommendation: Good to sell   around 1.7640, with stop loss of 1.7800 and target price of 1.7540