FxWirePro: GBP/AUD largely muted post UK CPI data, finds stiff resistance at 21-EMA

GBP/AUD chart on Trading View used for analysis

• The pound was largely unmoved post UK CPI data which came in line with estimates.
   
• The UK Consumer Prices Index came in at 2.3% y/y in Nov, in line with estimates and down from October’s 2.4%.
   
• The core inflation gauge (excluding volatile food and energy items) also matched forecasts, arrived at 1.8% y/y versus 1.9% in Oct.
   
• The monthly figures showed that the UK consumer prices rose to 0.2% in November, matching expectations and compared to 0.1% previous.
   
• GBP/AUD upside finds stiff resistance at 21-EMA, any further gains only on break above.
   
• The pair is holding above 5-DMA support and 5-DMA is biased north.
   
• Stochs and RSI support upside and we evidence a bullish divergence on RSI and Stochs which adds to the upside bias. 
   
• Major trend in the pair is bearish and rejection at 21-EMA will see resumption of weakness.
   
• Break above 21-EMA eyes 38.2% Fib at 1.7789. On the flipside, 5-DMA is immediate support at 1.7558, break below will see weakness.

Support levels - 1.7558 (5-DMA), 1.7290 (Dec 12 low), 1.7278 (Lower BB)

Resistance levels - 1.7761 (55-EMA), 1.7789 (38.2% Fib), 1.7834 (110-EMA)

Recommendation: Stay long on decisive break above 21-EMA, target 1.77/ 1.7775 

For details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.