• GBP/AUD initially gained on Thursday on month end squaring but gains were limited as GBP was dogged by low rates, high inflation and mounting UK-EU trade angst.
• Sterling bounces off weekly low,UK gradual path likely keeps downward pressure on GBP.
• Bulls will need a clear 1.7739(50%fib) to take greater control, failure to break higher will spur fresh downward momentum.
• Technical signals are mixed as RSI is at 51, daily momentum studies 5, 30 DMAs are trending down.
• Immediate resistance is located at 1.7659 (5DMA ), any close above will push the pair towards 1.7739(50%fib).
• Strong support is seen at 1.7584 (38.2%fib) and break below could take the pair towards 1.7509 (June 17th low).
Recommendation: Good to buy on dips around 1.7630, with stop loss of 1.7740 and target price of 17500.
