GBPAUD recently fell through a major support area around the 1.7600 major psychological mark and dropped to a low of 1.7441. Price has since pulled up for a retest of the broken support, which might now hold as resistance.

The 100 SMA is below the 200 SMA to indicate that the path of least resistance is to the downside or that the selloff is more likely to resume than to reverse. The 38.2% level lines up with the former support, which lines up with the 100 SMA dynamic inflection point.

The 50% level lines up with the 200 SMA around 1.7633 and the 61.8% Fib is closer to the 1.7700 major psychological mark. If any of these hold as resistance, GBPAUD could resume the drop to the swing low or lower.

Stochastic is already starting to turn lower from the overbought region to signal a pickup in selling pressure. The oscillator has plenty of room to head south before reflecting exhaustion among sellers.

There are no major reports due from both the UK economy and Australia today, so GBPAUD traders could take cues from overall market sentiment. In particular, the upcoming US NFP release might have a potentially large impact on risk-taking before the end of the week.

Analysts are estimating a slower pace of hiring gains in June, which might convince market watchers that the Fed could hold off another aggressive rate hike. Some are even projecting a decline in hiring, which might spur recession fears. The consensus is for a 260K increase in employment versus the earlier 390K gain, although revisions are still eyed.

In any case, a return in risk-off flows might mean some downside for the higher-yielding Aussie, as this could translate to slower purchases of commodities. On the other hand, a pickup in risk-taking could mean gains for the commodity currency.