GBP/AUD Buyers Face Key Resistance Ahead of BoE Meeting
Market Overview
The British pound continues its upward trajectory against the Australian dollar, bolstered by persistently high inflation in the UK. For the second consecutive month, inflation has exceeded previous levels, intensifying expectations of a hawkish stance from the Bank of England (BoE) in its Thursday meeting. In contrast to major central banks adopting more dovish approaches by year-end, the BoE’s decision to maintain rates could provide further strength to the pound, reinforcing its dominance over other currencies, including the Australian dollar.
Technical Analysis
The GBP/AUD pair remains firmly entrenched in a medium-term uptrend. Buyers have recently mounted a significant attack on the critical resistance level at 2.01283. A decisive breach of this level would signal the continuation of the bullish rally, with subsequent targets projected at 2.01516, 2.01631, and the psychological barrier at 2.01846.
Oscillators Confirmations
Momentum indicators further validate the strength of the bullish narrative. A hidden divergence between the price and the RSI suggests an increasing likelihood of upward continuation. Additionally, the MACD histogram is approaching the zero line as sellers retreat, reinforcing the growing dominance of buyers in the market. The pair is also trading above key moving averages, which continue to slope upward, underscoring the prevailing bullish sentiment.
Alternative Scenario
However, failure to surpass the 2.01283 resistance could prompt a pullback. In this scenario, immediate support lies at 2.01068, with further support levels positioned at 2.00720. A break below these levels would shift momentum and potentially invite sellers back into the market.
Key Levels
- Resistance Levels: 2.01283, 2.01516, 2.01631, 2.01846
- Support Levels: 2.01068, 2.00720
Key Events to Watch
Investors are keenly awaiting the BoE’s monetary policy decision, with forecasts indicating that the committee will likely maintain the current interest rate at 4.75%. However, expectations point to a sharp reduction in votes favoring rate cuts, from eight members to just two. Meanwhile, the majority of members are expected to support holding rates steady. The subsequent press conference by the BoE Governor will be instrumental in shaping the outlook for the central bank’s 2025 policy direction.
Conclusion
GBP/AUD remains in a strong bullish trend, with a key resistance level at 2.01283 standing as the next hurdle for buyers. A breakout would open the path toward higher targets, while failure to breach this level could lead to a consolidation or a short-term pullback. All eyes are on the BoE’s decision, which will likely define the pair’s direction for the remainder of the week.
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