FxWirePro: GBP/AUD pauses downside at 20-DMA (1.7577), break below will see further downside

• GBP/AUD has taken support at 20-DMA at 1.7577 and edged higher to currently trade at 1.7597 levels.
   
• We see this as a temporary pause and break below 20-DMA will see further weakness.
   
• The major is extending downside after forming 'Double Top' at 1.80 levels. Bearish divergence from price action on RSI and Stochs supports the bearish bias.
   
• Focus now on CPI and Friday’s retail sales along with a number of speeches from senior Cabinet ministers.
   
• An uptick in core CPI could be read as a sign that demand-pull inflation is on the rise and hence may yield rally in GBP.
   
• That said, Brexit concerns could still cripple any advances made, weighing on the pair.
   
• Next major support below 20-DMA is seen at 50-DMA at 1.7478 ahead of 100-DMA at 1.7321.
   
• On the flipside, retrace and close above 5-DMA could see the pair re-test 1.80 levels. We see bearish invalidation only on decisive break above 1.80 levels.

Support levels - 1.7577 (20-DMA), 0.7478 (50-DMA), 1.7351 (Jan 29 low), 1.7321 (100-DMA)

Resistance levels - 1.7698 (5-DMA), 1.79 (Dec 1 high), 1.80 (Double top)

Call update: Our previous call (https://www.econotimes.com/FxWirePro-Good-to-short-GBP-AUD-on-Double-Top-and-bearish-divergence-1144990) has almost hit TP2.

Recommendation: Book partial profits, trail SL to 1.77. Watch for break below 20-DMA for further weakness.

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