- GBP/AUD has broken below 5-DMA on Monday and recovery attempts today lack traction.
- Upside remains capped below 5-DMA which is now stiff resistance at 1.7026.
- UK construction PMI missed expectations and fell for first time in 13 months weighing on the pound.
- Seasonally adjusted IHS Markit/CIPS UK Construction PMI registered at 48.1 in September, down from 51.1 in August, slipping into contraction.
- The pair fell from session highs at 1.7010 and is currently hovering around 1.6953 levels.
- Technical studies support downside. Stochs and RSI are on verge of rollover from overbought levels.
- MACD is on verge of bearish crossover on signal line and bearish divergence on RSI and Stochs raises scope for downside.
Support levels - 1.6930 (23.6% Fib retrace of 1.61625 to 1.71676 rally), 1.6797 (20-DMA), 1.6783 (38.2% Fib)
Resistance levels - 1.7027 (5-DMA), 1.7110 (Apr 19th high), 1.7123 (July 7 high)
Call update: We had advised a short on break below 5-DMA (https://www.econotimes.com/FxWirePro-Bearish-divergence-on-RSI-and-Stochs-raises-scope-for-downside-in-GBP-AUD-go-short-on-break-below-5-DMA-at-16933-916407).
Recommendation: Bias lower. Stay short. Hold for targets.
FxWirePro Currency Strength Index: FxWirePro's Hourly GBP Spot Index was at -96.0769 (Bearish), while Hourly AUD Spot Index was at -0.882477 (Neutral) at 1115 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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