- GBP/AUD extends downside for 4th successive session, bias lower.
- Technical indicators on intraday charts are bearish, Stochs sharply lower, MACD shows bearish crossover.
- Downbeat UK construction PMI to keep the pound dented. We see scope for further downside.
- Data released on Tuesday showed seasonally adjusted IHS Markit/CIPS UK Construction PMI slipped into contraction, came in at 48.1 in September, down from 51.1 in August.
- Upside remains capped below 5-DMA which is now stiff resistance at 1.6979, bearish invalidation on break above.
Support levels - 1.6822 (20-DMA), 1.6783 (38.2% Fib), 1.6658 (200-DMA)
Resistance levels - 1.6930 (23.6% Fib retrace of 1.61625 to 1.71676 rally), 1.6979 (5-DMA), 1.7110 (Apr 19th high), 1.7123 (July 7 high)
Call update: Our previous call (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) as hit TP1.
Recommendation: Bias lower. Stay short. Hold for targets.
FxWirePro Currency Strength Index: FxWirePro's Hourly GBP Spot Index was at -57.7348 (Neutral), while Hourly AUD Spot Index was at 60.8118 (Neutral) at 0430 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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