GBP/AUD is not getting traction despite higher-than-expected CPI data from the U.K.!
Will this lead to GBP/AUD starting a downswing in the next trading sessions?
We know from earlier today that the U.K.’s consumer inflation remained high, with annual headline CPI remaining at 6.7% (vs. 6.6% expected) while the core figure only dipped from 6.2% to 6.1% when analysts saw it slipping all the way to 6.0%.
A sticky high inflation supported hawkish calls for the Bank of England (BOE) and the British pound traded higher against its major counteparts.
GBP/AUD 1-hour Forex Chart by TradingView
Despite GBP’s strength, GBP/AUD was still unable to trade above a trend line support that it recently broke.
In fact, the pair is staying closer to the 1.9100 psychological level that lines up with the S1 Pivot Point line in the 1-hour time frame.
We don’t have far to look for clues. Better-than-expected Chinese growth markers printed during the Asian session made it a bit easier to buy “risky” assets like AUD and NZD.
Meanwhile, higher gold and crude oil prices have also increased the demand for commodity-related currencies like AUD, NZD, and CAD.
For now, we’re keeping close tabs on GBP/AUD possibly extending its intraweek downswing.
GBP/AUD traders who anticipate more selling can short around the 1.9100 levels or at a potential broken trend line retest. The 1.9050 and 1.9000 areas of interest make for good initial targets but you can also aim lower if there’s enough bearish momentum.
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