GBP/AUD Market Analysis

GBP/AUD, Time frame: 4H, Source: TradingVieW

GBP/AUD is trading around 1.9130, with the pair caught between diverging monetary policy expectations in the UK and Australia as markets await fresh economic data that could determine its next move.

On the Australian side, the Reserve Bank of Australia kept interest rates at 4.35% at its latest meeting following three hikes since the start of the year. However, the RBA maintained a hawkish tone, warning that inflation remains elevated and leaving the door open to further tightening if price pressures persist.

This stance could continue to support the Australian dollar, potentially limiting upside momentum in GBP/AUD, particularly if upcoming data strengthens expectations for another RBA rate hike.

Meanwhile, the Bank of England kept its policy rate at 3.75%, with UK inflation easing to 2.6%. However, policymakers remain cautious about renewed inflationary pressures, particularly from higher energy prices. Attention now shifts toward upcoming UK growth data, where stronger-than-expected figures could provide fresh support for sterling, while signs of economic weakness could weigh on the pound.

Technical Outlook

From a technical perspective, GBP/AUD remains within an ascending channel on the four-hour chart, with the pair repeatedly finding buyers around the channel’s lower boundary.

The 1.90739 area remains the key support level. As long as the pair holds above this level and the lower boundary of the channel, the broader bullish structure remains intact, keeping the possibility of another move toward the upper side of the channel in play.

However, a decisive break and close below 1.90739 would weaken the bullish structure and could signal the beginning of a deeper downside correction.

For now, the battle around this support zone could be crucial in determining whether GBP/AUD extends its recovery or breaks away from its recent bullish structure according to technical analysts.