• GBP/AUD strengthened on Thursday as sterling gained support bond markets stabilized and investors awaited Friday’s US nonfarm payroll report.
• UK long-term borrowing costs retreated after touching their highest since 1998 earlier this week.
• The yield on 30-year government bonds eased to 5.57%, down from Wednesday’s peak of 5.75%..
• On the data front, UK construction activity fell for an eighth month in August, though PMI improved to 45.5 from July’s five-year low of 44.3.3.
• Immediate resistance is located at 2.0711(50%fib), any close above will push the pair towards 2.0729 (SMA 20)
• Support is seen at 2.0591(38.2%fib) and break below could take the pair towards 2.0513 (Lower BB).
Recommendation: Good to buy around 2.2600 with stop loss of 2.2520 and target price of 2.2700
