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FxWirePro: GBP/AUD bounces off 5-DMA support, 20-DMA at 1.6373 in sight

  • GBP/AUD extends upside after gap-up open, eyes 20-DMA at 1.6373.
     
  • Overall bias is lower. The pair is trading in a slopping channel. Finds stiff resistance at 4H cloud.
     
  • Break above 4H cloud targets 20-DMA at 1.6373. We see reversal in downtrend only on break above 20-DMA.
     
  • That said, the pound remains under pressure amid renewed UK political concerns surrounding the Brexit issue.
     
  • On the downside, the pair is struggling to close below 78.6% Fib retrace of 1.5789 to 1.76509 rally at 1.6187.
     
  • Break below likely to see test of 1.6040 (trendline and then 1.60 (88.6% Fib). Violation at 1.60 finds little support till channel base at 1.5895.

Support levels - 1.6208 (5-DMA), 1.6187 (78.6% Fib retrace of 1.5789 to 1.76509 rally), 1.6101 (88.6% Fib), 1.6040 (trendline support)

Resistance levels - 1.6281 (4H cloud top), 1.63, 1.6373 (20-DMA), 1.64

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