• GBP/AUD inched higher on Monday but lacklustre PMI results and fiscal uncertainties in the UK capped gains.
• Reeves is expected to raise taxes again, following last year’s employer-focused hikes, amid weak growth and rising borrowing costs straining UK public finances.
• The move comes as Britain faces a subdued economic growth outlook and rising borrowing costs, which are placing additional pressure on public finances.
• On the data front, the S&P Global/CIPS manufacturing PMI slipped to 47.0 in August from July’s six-month high of 48.0, below the preliminary 47.3 reading. This marks the 11th consecutive month of contraction, staying below the neutral 50 level
• Technical signals remain bearish, with RSI at 45 and the 5 , 9 , and 11 day moving averages all trending lower.
• Immediate resistance is located at 2.0736(SMA 20), any close above will push the pair towards 2.0886 (50% fib).
• Strong support is seen at 2.0607 (38.2% fib) and break below could take the pair towards 2.0480(Lower BB).
Recommendation: Good to sell around 2.0700, with stop loss of 2.0760 and target price of 2.0610
