1. Technical Backdrop
- Trend Structure: GBPAUD remains in a bearish channel on the 4-hour chart, trading below the 100- and 200-period moving averages (~2.0688)
- Momentum Signals:
- MACD shows weak bearish momentum but hints at a bullish crossover, indicating a possible pause or reversal in selling pressure
- Key Technical Levels:
- Resistance: ~2.0688 (100/200 MA zone); a close above could trigger a reversal toward 2.0760+
- Support: ~2.0565; a break below would likely confirm a bearish continuation toward 2.0500 or lower
Watch price action at 2.0688 and 2.0565 for near-term trade cues.
2. Fundamental Drivers
- Bank of England (BoE):
- Cut interest rates to 4.25% on May 8, signaling measured easing.
- Persistent inflationary pressures suggest the BoE will move cautiously, supporting the pound compared to more aggressive easing elsewhere.
- Reserve Bank of Australia (RBA):
- Current rate: 4.10%
- The RBA is more dovish, with markets pricing in a possible 50 bps cut in May amid domestic economic softness.
- This divergence weighs on the AUD, though the Aussie may benefit if the RBA holds or tones down dovish language.
3. Trade Triggers & Events to Watch
- Bearish Trigger: A break below ~2.0565 may confirm further downside toward 2.0500 and 2.0430
- Bullish Reversal Risk: A close above 2.0688–2.0760 could shift sentiment and open upside toward 2.0880
Key Catalysts This Week:
- May 20: RBA policy decision – tone/direction will be critical for AUD strength or weakness
- UK inflation and trade data – surprises could influence BoE rate path expectations
GBPAUD – H4 Timeframe
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The price action on the 4-hour timeframe chart of GBPAUD presents two focus areas in favor of the bullish sentiment. The initial point of interest is mainly defined by the SBR pattern, FVG, and inducement from the previously swept low. The second point of interest features a confluence of the trendline support, rally-base-rally demand zone, and the double bullish break of structure. Given the circumstances, further confirmation from the lower timeframes is required.
Analyst's Expectations:
Direction: Bullish
Target- 2.09915
Invalidation- 2.05416
CONCLUSION
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