• GBP/AUD gained some ground as investors remained focused on the conflict in the Middle East and the impact a prolonged war would have on monetary policy.
• Efforts to resolve the conflict remain frozen, while tensions escalated on Wednesday after Iranian missile fire damaged Kuwait’s airport and U.S. strikes targeted areas near the Strait of Hormuz.
• The UK’s higher dependence on imported energy means it is more sensitive than the U.S. to shifts in global fuel prices. While prices have retreated from their late April highs.
• On the data front, British services firms suffered a small fall in activity in May as the strains of the Iran war pushed costs up sharply and hit optimism, an S&P Global survey showed.
• Immediate resistance is located at 1.8842 (38.2% fib), any close above will push the pair towards 1.8911(SMA 20).
• Strong support is seen at 1.8750(SMA 20) and break below could take the pair towards 1.8612(Lower BB).
Recommendation: Good to buy on around 1.8820, with stop loss of 1.8900 and target price of 1.8760
