FxWirePro: GBP/AUD pauses decline, downside risk remains

• GBP/ AUD dipped on Monday but downside was limited as investors turned their attention to a busy week of economic data.

• Key economic data due later this week that could make or break the case for more rate cuts from the Bank of England.

•Inflation remains well above the Bank of England’s 2% target, yet investors are anticipating a 25-basis-point rate cut next month as evidence grows that tight monetary policy is pressuring both the labour market and the wider economy.

• The BoE kept its main interest rate on hold at 3.75% earlier this month in a tight 5-4 vote, but it said borrowing costs were likely to fall if an expected drop in inflation were to be sustained.

 •Technical are signals show the pair could lose more ground in the short-term as RSI has turned lower.

• Immediate resistance is located at 1.9321 (38.2%fib), any close above will push the pair towards 1.9395(Feb 9th high).

• Immediate support is seen at 1.9240(Feb 14th low) and break below could take the pair towards 1.9117(23.6%fib).

Recommendation: Good to sell  around 1.9270, with stop loss of 1.9350 and target price of 1.9200