FxWirePro: GBP/AUD trades in narrow range below 200-DMA, bias lower, stay short

• GBP/AUD extends weakness below 200-DMA support at 1.6660, bias still lower.
   
• The pair hit 3-month lows at 1.6387 on Tuesday and has since pared some losses to currently trade at 1.6424.
   
• The Bank of England has taken a noticeably hawkish line recently, but yesterday's inflation data miss casts doubt over a rate hike later this year.
   
• On the other side, the RBA's hawkish tone in its July monetary policy meeting minutes keep the Aussie supported.
   
• GBP/AUD trades with a heavily bearish bias, scope for test of 1.6020 level (major trendline support).
   
• Bearish invalidation on retrace above 200-DMA.
   

Support levels - 1.62 (Feb 7 low), 1.6180 (Mar 29 low), 1.6020 (trendline), 1.60 (Jan 16 low)

Resistance levels - 1.6660 (200-DMA), 1.6676 (5-DMA), 1.6840 (20-DMA)

Call update: Our previous call (http://www.econotimes.com/FxWirePro-Pound-slumps-on-surprise-UK-inflation-dip-good-to-short-rallies-in-GBP-AUD-807679) is progressing well.

Recommendation: Bias lower, stay short.

FxWirePro Currency Strength Index: FxWirePro's Hourly GBP Spot Index was at -128.952 (Bearish), while Hourly AUD Spot Index was at 175.774 (Bullish) at 1015 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.

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