FxWirePro: GBP/AUD holds 20-DMA support, weakness seen on break below

• GBP/AUD has edged higher after holding support by 20-DMA at 1.6183.
   
• Upside, however, lacks traction, with 5-DMA at 1.6316 and daily cloud at 1.6357 acting as major resistance.
   
• We see scope for further downside in the pair after rejection at 100-DMA.
   
• Price action is below daily cloud and any reversal only on break above.
   
• Technical studies are bearish, RSI is biased lower and Stochs have rolled over from overbought levels.
   
• We expect GBP to remain under pressure as Article 50 is triggered and uncertainty will weigh on the pound.
   
• Break below 20-DMA will see drag upto trendline support at 1.59. On the flipside, bearish invalidation only above 100-DMA at 1.6533.

Support levels - 1.6183 (20-DMA), 1.60 (Jan 16 low), 1.59 (trendline)

Resistance levels - 1.63, 1.6317 (5-DMA), 1.6485 (Feb 9 high), 1.6533 (100-DMA)

Call update: We had advised a short call (http://www.econotimes.com/FxWirePro-GBP-AUD-trade-idea-614617). 

Recommendation: We recommend staying short in the pair.

FxWirePro Currency Strength Index: FxWirePro's Hourly GBP Spot Index was at -73.8274 (Bearish), while Hourly AUD Spot Index was at 85.0526 (Bullish) at 0550 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.