• GBP/AUD hovered near 3-month low on Tuesday as investors digested Bank of England Governor Andrew Bailey comments awaited US inflation data.
• Andrew Bailey said on Tuesday that the Bank of England’s next rate move remained uncertain and would hinge on economic and geopolitical developments.
• Bailey said investors were pricing more rate hikes than the BoE’s expected policy path warranted, with the risk premium reflecting fears of higher energy prices.
•BoE Deputy Governor Dave Ramsden and external MPC members Megan Greene and Alan Taylor also attended the hearing on Tuesday.
•Ramsden viewed domestic inflation risks as relatively contained, while Taylor said maintaining restrictive rates would provide a buffer against external shocks.
• Immediate resistance is located at 1.8812(Sep 4th high), any close above will push the pair towards 1.8912(38.2%fib).
• Immediate support is seen at 1.8745(23.6%fib) and break below could take the pair towards 1.8675(Lower BB ).
Recommendation: Good to sell around 1.8780, with stop loss of 1.8880 and target price of 1.8720
