• GBP/AUD dipped on Tuesday as the deepening conflict in the Middle East kept investors nervous.
• U.S. Defense Secretary Pete Hegseth said on Tuesday the next few days in the war against Iran would be decisive and warned Tehran that the conflict would intensify if it did not make a deal.
• The turmoil sparked a flight to safety, while rising inflation fears clouded the outlook and led investors to reassess traditional safe-haven assets.
· Traders anticipate higher energy prices will force central banks to keep policy tight to prevent a surge in second-round inflation, and have changed expectations most dramatically for the Bank of England.
·In late February, markets were pricing two BoE rate cuts this year, and now see at least two hikes. Moves have been less dramatic for the Federal Reserve.
• Immediate resistance is located at 1.9375(Higher BB), any close above will push the pair towards 1.9455(Higher BB).
• Strong support is seen at 1.9056 (38.2%fib ), and break below could take the pair towards 1.9000(Psychological level).
Recommendation: Good to buy around 1.9050 with stop loss of 1.8950 and target price of 1.9120
