Analysis of the GBP/AUD pair 

The Australian pound from an economic perspective

The Australian dollar fell on Thursday as investors awaited new fiscal announcements and hawkish interest rate forecasts. Finance Minister John Haley warned of rising business costs alongside ongoing cost-of-living pressures, which reinforced concerns about inflation outlook in the UK.

Financial markets currently expect the Bank of England to raise interest rates by about a quarter of a percentage point twice by the end of the year.

On the other hand, the Australian dollar rose as job opportunities increased; this positive data reinforced signs of a strong labor market and prompted markets to raise the probability of another interest rate hike by the end of the year to 90%, up from 78% previously.

The Australian Dollar from a Technical Perspective

The Australian dollar pair retreated as we expected after completing the harmonic bat pattern, pulling back from the 1.9360 level to the uptrend levels at 1.9065.

From there, we expect some upward retracement toward the 1.9185 resistance level as an initial target, followed by the 1.9250 level.

This scenario would fail if the pair breaks below 1.9050 and closes a daily candle below that level; in that case, we expect the decline to continue toward 1.8800 and then 1.8730.