• GBP/AUD strengthened on Monday as gains were driven by position squaring ahead of key UK economic data that could reinforce expectations for a more hawkish Bank of England stance.
• Market sentiment improved slightly as concerns over the U.S.-Iran conflict eased, supporting equities, while U.S. Treasury yields edged modestly higher.
• Investors are focused on upcoming UK labour market data on Tuesday and CPI/PPI inflation figures on Wednesday, which could provide important guidance for future BoE policy decisions.
• Despite the recovery in the pair, concerns over the UK’s fiscal outlook remain elevated, with 10-year gilt yields hovering near 5.10%, while political uncertainty continues to weigh on sentiment.
• Immediate resistance is located at 1.8812( SMA20), any close above will push the pair towards 1.8852(50%fib).
• Strong support is seen at 1.8549(23.6%fib) and break below could take the pair towards 1.8509 ( lower BB).
Recommendation: Good to sell around 1.8800, with stop loss of 1.8880 and target price of 1.8740
