• GBP/AUD held firm on Wednesday as Australian dollar weakened after the release of Australian CPI data for May.
• Australian consumer prices fell in May due to lower fuel and travel costs, but stronger-than-expected core inflation kept the possibility of another RBA rate hike alive.
• Australian CPI fell 0.7% in May from April, according to ABS data, while annual inflation eased to 4.0% from 4.2%.Both readings came in weaker than expectations, with economists forecasting a 0.4% monthly decline and 4.3% annual inflation.
• Investors are focusing on Australia’s upcoming May employment report due on Thursday, which is expected to provide fresh signals on the health of the labour market. According to a Reuters poll, employment is forecast to rise by 30,000 jobs, while the unemployment rate is expected to remain steady at 4.4%.
• Immediate resistance is located at 1.9140(Daily high), any close above will push the pair towards 1.9173(38.2%fib).
• Strong support is seen at 1.9040(50%fib) and break below could take the pair towards 1.8936(61.8%fib).
Recommendation: Good to buy around 1.9080, with stop loss of 1.9000, and target price of 1.9150
