GBPAUD is trending higher on its daily time frame, moving above a rising trend line connecting the lows of price action since last year. The pair looks ready to make a retracement to the support area, which is near the moving averages.
For now, it looks like the 100 SMA is already holding as support and price appears to be making a bounce off the dynamic inflection point. If bulls are able to keep it up, a move back to the previous highs at 2.2500 could take place.
On the other hand, a larger pullback to the actual trend line near the 50% Fib could still be in the cards. An even larger correction to the 61.8% Fib and 200 SMA is also possible, although this would be the line in the sand for any retracements. A break below this area could signal that a reversal is taking place.
GBPAUD Fundamental Factors
Last week, the BOE sounded very dovish in their central bank announcements, admitting that it may take much longer for them to hike interest rates than initially predicted. Policymakers said that their economic outlook has weakened since their earlier Inflation Report, leading them to downgrade some of their forecasts.
On the other hand, the RBA was less downbeat in their policy statement, with Governor Stevens saying that the prospects for improvement have firmed a little. This went against market expectations of a rate cut, as commercial banks appeared to make room for lower borrowing costs by already putting mortgage rate adjustments in place.
There are no major reports due from Australia or the UK today, but the upcoming top-tier releases throughout the week could play a role in price action. UK jobs data is due on Wednesday and a 1.6K rise in joblessness is eyed. Australia will take its turn to release its jobs data on Thursday and possibly show a 14.8K rise in hiring.
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