• GBP/AUD recovered most of earlier losses as investors digested UK inflation data and awaited the Bank of England’s rate decision.
• British inflation fell far more than expected to 3.2% in November from 3.6% in October, its lowest since March, cementing market expectations of a Bank of England rate cut on Thursday.
• The reading was below all forecasts in a Reuters poll of economists - which had pointed to a fall to 3.5% - and undershot the BoE's own expectation of a drop to 3.4%.
• Markets fully priced in a BoE rate cut on Thursday, expected to bring the Bank Rate down to 3.75% by year-end.
•Last month, the BoE’s MPC voted 5-4 to keep rates on hold, breaking its quarterly rate-cut pattern since 2024; economists expect a narrow 5-4 rate cut in December.
• Immediate resistance is located at 2.0268(38.2%fib), any close above will push the pair towards 2.0370(Higher BB).
• Immediate support is seen at 2.0186 (SMA 20) and break below could take the pair towards 2.0023(23.6%fib).
Recommendation: Good to buy around 2.0220 with stop loss of 2.0150 and target price of 2.0300
