FxWirePro: GBP/AUD tracks lower on firmer Australian dollar

• GBP/AUD eased on Monday as the Australian dollar  firmed after the RBA’s December meeting minutes

• The RBA’s December meeting minutes indicated policymakers saw increased inflation risks following higher-than-expected CPI data in October and Q3.

• The minutes noted that some of the recent rise in inflation might be due to temporary factors, with clearer insights expected from Q4 data in late January.

• The minutes showed that policymakers were split on whether financial conditions were still restrictive, with some pointing to robust bank lending and climbing house prices as signs that conditions had eased.

• Markets are already factoring in a rate hike, assigning roughly a 25% chance to February. By July, a 0.25% increase is fully priced, with 44 basis points of tightening expected in 2026.

• Immediate resistance is located at 2.0517(SMA 20), any close above will push the pair towards 2.0220(38.2%fib).

• Immediate support is seen at 2.0038(23.6%fib) and break below could take the pair towards 1.9977 (Lower BB)

Recommendation: Good to sell around 2.0170 with stop loss of 2.0220  and target price of 2.120