• GBP/AUD initially gained but gave up ground as traders reposition ahead of the Reserve Bank of Australia (RBA) interest rate decision due on Tuesday
• The Reserve Bank of Australia (RBA) is widely expected to hike the Cash Rate by 25 bps and bring it to 3.85% following hot employment and inflation data..
• The focus will be on the forward guidance and whether the RBA strikes a hawkish or cautious tone. The market is pricing 55 bps of tigthening by year-end, which means there's another rate hike expected..
• Technical signals are bearish as RSI is at 25, momentum studies 11,14 and 21 DMAs are trending down.
• Immediate resistance is located at 1.9777 (Feb 2nd high), any close above will push the pair towards 1.9862 (38.2%fib).
• Immediate support is seen at 1.9951(23.6%fib) and break below could take the pair towards 1.9432 (Lower BB).
Recommendation: Good to sell around 1.9680 with stop loss of 1.9900 and target price of 1.9600
