FxWirePro: GBP/AUD capped below 5-DMA in falling channel, eyes 1.6040, stay short

• GBP/AUD extends downside in falling channel, on track to test 1.6040 levels (trendline support).
   
• The pound remains under pressure amid renewed UK political concerns surrounding the Brexit issue.
   
• The second estimate of the Q2 UK GDP due later in the day is expected to offer little impetus to the pound.
   
• The pair is struggling to close below 78.6% Fib retrace of 1.5789 to 1.76509 rally at 1.6187.
   
• Break below likely to see test of 1.6040 (trendline and then 1.60 (88.6% Fib).
   
• Violation at 1.60 finds little support till channel base at 1.5895. We see bearish invalidation only on close above 20-DMA at 1.6398.

Support levels - 1.6187 (78.6% Fib retrace of 1.5789 to 1.76509 rally), 1.6101 (88.6% Fib), 1.6040 (trendline support)

Resistance levels - 1.6213 (5-DMA), 1.63, 1.6398 (20-DMA), 1.64

Call update: Our previous call (http://www.econotimes.com/FxWirePro-GBP-AUD-breaks-major-trendline-support-at-16360-bias-lower-stay-short-for-16040-858096) has hit TP1.

Recommendation: Watch out for break below 1.6187 for further weakness.

FxWirePro Currency Strength Index: FxWirePro's Hourly GBP Spot Index was at -86.9268 (Bearish), while Hourly AUD Spot Index was at -93.4325 (Bearish) at 0610 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.

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