FxWirePro: GBP/AUD capped below 20-DMA at 1.6506, bias lower, stay short

• GBP/AUD is trading a narrow range on the day, upside capped below 1.65 handle.
   
• Brexit jitters continue to dent GBP, Theresa May’s future as the UK’s PM in doubt amid a drop in markets’ confidence on May’s ability to handle the Brexit talks.
   
• The pair is trading in a symmetric triangle pattern, bias remains lower.
   
• Better-than expected UK Halifax HPI data buoyed GBP on Monday, pushing the pair higher.
   
• But upside looks limited. The pair finds stiff resistance at 20-DMA at 1.6506. Any further bullishness only on break above.
   
• 'Shooting Star' formation adds to bearish bias. Technical indicators slightly bearish.
   
• RSI is below 50 levels and Stochs are biased lower. Intraday bias bearish as long as pair holds below 20-DMA.
   
• We see scope for bullish reversal only on decisive break above 200-DMA at 1.6691. Test of trendline at 0.69 then likely.

Support levels - 1.6427 (Jan 31 low), 1.64, 1.6330 (trendline), 1.63 (July 27 low)

Resistance levels - 1.6492 (5-DMA), 1.6506 (20-DMA), 1.66, 1.6691 (200-DMA)

Call update: Our previous call (http://www.econotimes.com/FxWirePro-GBP-AUD-capped-below-20-DMA-Pound-extends-BoE-induced-sell-off-838302) has hit TP1.

Recommendation: Bias lower as long as pair holds below 20-DMA. Stay short.

FxWirePro Currency Strength Index: FxWirePro's Hourly GBP Spot Index was at -120.688 (Bearish), while Hourly AUD Spot Index was at 42.7799 (Neutral) at 0640 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.

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