• GBP/ AUD strengthened on Wednesday after a survey showed that business activity in the UK exceeded expectations.
• The preliminary S&P Global/CIPS UK Composite PMI, which includes both services and manufacturing businesses, increased to a seven-month high of 52.5 in January, up from 52.1 in December and above expectations for a slightly smaller gain to 52.2.
• The pair trades solidly at 1.9326 levels and has thus far avoided sliding below the critical 38.2% fib support line.
• Technical signals show the pair could gain more ground in the short-term as RSI is at 64 bullish, daily momentum studies 5, 9 and 11 DMAs are trending up.
• Immediate resistance is located at 1.9348 (Daily high), any close above will push the pair towards 1.9396 (23.6%fib).
• Strong support is seen at 1.9247 (38.2%fib) and break below could take the pair towards 1.9207 (Jan 19th low)
Recommendation: Good to buy around 1.9320 with stop loss of 1.9200 and target price of 1.9400
