FxWirePro: GBP /AUD extends losses amid mounting UK fiscal concerns

• GBP/AUD fell on Tuesday as news of an expected OBR productivity downgrade renewed worries over the UK’s fiscal health.

• Britain’s budget watchdog is expected to lower its key productivity forecast by 0.3 percentage points more than anticipated which could result in a £20 billion ($26.8 billion) hit to public finances.

• Finance Minister Rachel Reeves said the Office for Budget Responsibility is expected to lower its productivity forecast, admitting that its previous projections had been overly optimistic.

• The downgrade increases pressure ahead of next week’s Bank of England policy meeting and the forthcoming autumn budget.

• Immediate resistance is located at 2.9356(38.2%fib), any close above will push the pair towards 2.0452 (SMA 20).

• Immediate support is seen at 2.0122(23.6%fib) and break below could take the pair towards 2.0076 (Lower BB).

Recommendation: Good to sell  round 2.0200, with stop loss of 2.0300 and target price of 2.0100