- Sterling seems to be gaining strength ahead of the Bank of England (BoE) ‘Super Thursday’.
- The BOE policy decision to be announced accompanied by the quarterly inflation report and meeting minutes.
- Analysts caution that investors should brace for hawkishness from the central bank.
- Technical indicators have turned bullish. RSI and Stochs are biased higher. MACD is now showing a bullish crossover on signal line.
- We see scope for further upside on decisive break above 200-DMA at 1.6685. Test of trendline at 0.69 then likely.
- On the flipside, 20-DMA is strong support at 1.6580 level. We see weakness only on break below.
Support levels - 1.6580 (20-DMA), 1.6554 (5-DMA), 1.65
Resistance levels - 1.67, 1.6776 (July 17 high), 1.6825 (50-DMA), 1.69 (major trendline)
Call update: Our previous call (http://www.econotimes.com/FxWirePro-GBP-AUD-pares-losses-below-5-DMA-intraday-bias-higher-830532) has hit all targets.
Recommendation: We recommend booking full profits. We prefer to remain on sidelines into BoE. Watch out for decisive break above 200-DMA to go long.
FxWirePro Currency Strength Index: FxWirePro's Hourly GBP Spot Index was at 95.9794 (Neutral), while Hourly AUD Spot Index was at -149.051 (Bearish) at 0640 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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