Market Spotlight: GBPAUD Trend Resumption Trade

market-spotlight:-gbpaud-trend-resumption-trade

GBPAUD Rejected At Key LevelGBPAUD price action is looking interesting for bears here. The decline from the break through the rising trend line over late 2021/early 2022 has seen the market breaking through several key levels. The break of 1.7813 (major support level) was a strongly bearish development for the pair. With price having recently retested the level and been rejected (large bearish pin bar), the focus now is on a resumption of the downtrend. With this in mind, bears can look for a break of the 1.7438 level targeting 1.7218 initially and 1.6726 thereafter. With the retail market more than 70% long there is plenty of room for the current sell off to continue further.Keep An Eye OnAussie CPI overnight came in well above market forecasts. With the RBA’s recent hawkish shift, the market is now playing catch up in terms of RBA tightening expectations. As such, AUD looks vulnerable to further upside near term. GBP, meanwhile, is being hit hard on growth concerns and political uncertainty around the current leadership. All eyes now will be on the upcoming RBA meeting in a week’s time. If the bank opts to hike rates and signals more to come, this should propel GBPAUD lower over the near term.

Source: Tickmill

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