• GBP/AUD slipped lower on Wednesday as tame inflation reports from the UK. fuelled expectations of more interest rate cuts this year.
•Data that showed British inflation unexpectedly slowed last month to 2.5% year on year.
• Investors raised their expectations for a Bank of England rate cut, assigning an 84% probability to a 0.25% reduction at the next monetary policy meeting on February 6.
•A daily close above 38.2%fib will further improve the technical outlook, and open the possibility of a rally towards 1.9550 level
• Immediate resistance is located at 1.9763(50%fib), any close above will push the pair towards 1.9882(61.8%fib).
• Immediate support is seen at 1.9632(38.2%fib) and break below could take the pair towards 1.9475 (23.6%fib).
Recommendation: Good to buy around 1.9670, with stop loss of 1.9760 and target price of 1.9550
