• GBP/AUD dipped on Tuesday as Australian Dollar gained after the Reserve Bank of Australia lifted its benchmark rate for the second straight time.
• Australia’s central bank raised its main cash rate for a second consecutive month on Tuesday, underscoring its ongoing effort to rein in persistently high inflation.
• Wrapping up its March policy meeting, the Reserve Bank of Australia (RBA) hiked rates by 25 basis points to 4.10%, a 10-month high and undoing two of the three cuts it made last year.
• This split suggests that while the tightening cycle may not be over, future rate hikes will likely be more data-dependent and subject to increasing debate, particularly as the central bank weighs inflation risks against potential impacts on growth and the labour market.
• Policymakers signaled that higher borrowing costs were still necessary to ensure price pressures are brought under control and inflation returns to target over time.
• Immediate resistance is located at 1.8955(SMA 20), any close above will push the pair towards 1.9042 (38.2%fib)
• Support is seen at 1.8722(Lower BB) and break below could take the pair towards 1.8682(Lower BB).
Recommendation: Good to sell around 1.8800 with stop loss of 1.8870 and target price of 1.8700
