• GBP/AUD hovered near three month low on Wednesday as traders grappled with surging oil prices above $100 a barrel amid intensifying Middle East tensions.
• Renewed tensions in the Middle East raised concerns over global oil supplies, pushing Brent crude above the key $100-a-barrel level on Wednesday..
• Investors are awaiting Thursday’s U.S. producer price data and Friday’s consumer inflation figures for fresh signals on whether the Fed may raise interest rates to tackle persistent price pressure.
• Markets are pricing in roughly a 60% chance of an interest rate hike at the central bank’s policy meeting next week, according to the CME FedWatch Tool..
• Meanwhile, markets see little likelihood of a Bank of England rate hike next week, although at least two increases are priced in by March, with a third carrying a 40% probability.
• Immediate resistance is located at 1.8847(38.2%fib), any close above will push the pair towards 1.8929(SMA 20).
• Immediate support is seen at 1.8706(38.2%fib) and break below could take the pair towards 1.8658(Lower BB ).
Recommendation: Good to sell around 1.8770, with stop loss of 1.8850 and target price of 1.8700
