The GBP/AUD currency pair is showing signs of continuing its month-long uptrend, having recently bounced from a key Fibonacci support zone and holding above the 1.9000 level and the Pivot Point at 1.904 on the 4-hour chart [1]. Earlier this week, GBP/AUD reached a multi-week high near R1 (1.9133) before retracing into the 38.2% – 50% Fibonacci retracement zone around 1.8900 – 1.8950, and has since rebounded [1].
The Reserve Bank of Australia (RBA) maintained its policy rate at 4.35% on Tuesday, and although Governor Bullock adopted a hawkish tone, the Australian dollar did not see significant gains. Market participants are not expecting another RBA rate hike in the near term, particularly after Chinese retail sales declined by 0.6% year on year in May, which has negatively impacted the demand outlook for Australia’s largest trading partner [1].
Attention is now shifting to the British pound, with the release of UK CPI data later today and the Bank of England’s policy decision scheduled for later in the week. Both events are anticipated to introduce volatility to GBP pairs, and a higher-than-expected inflation reading could provide further support for Sterling [1].
Technical analysis suggests that if GBP/AUD sustains its current momentum and receives a boost from UK economic data or BOE expectations, the pair could retest R1 (1.9133) and potentially move toward R2 (1.9252) within the prevailing ascending channel. Conversely, a loss of momentum below the Pivot and the 1.9000 level could see the pair targeting S1 (1.8885) and possibly S2 (1.8755) [1].
Traders are advised to monitor upcoming catalysts, including UK CPI, the BOE decision, and the FOMC event, as these could significantly influence GBP/AUD direction and overall market sentiment [1].
CONCLUSION
GBP/AUD remains in an uptrend, with key UK economic events and central bank decisions poised to drive volatility in the coming days. Market participants are closely watching for data surprises and policy signals that could determine the pair’s next move.