FxWirePro: GBP/AUD gains fade after UK CPI data

• GBP/AUD initially gained on Wednesday but gave up some ground as market digested UK inflation data

• UK inflation hit 3.8% in July, the fastest among G7 nations in 18 months and nearing the BoE’s 4% forecast.

• The data dampened expectations for an imminent BoE rate cut, with traders now eyeing a 0.25% reduction in March next year, down from earlier bets on a cut before the end of 2025.

• Wednesday’s data indicated that transport costs, especially airfares, were the main driver of July’s inflation increase a category BoE policymakers often discount due to its volatility.

• Technical are bullish, daily RSI is    at 67, daily momentum studies  9 and 10 DMAs are trending up. 

• Immediate resistance is located at 2.1009 (Higher BB), any close above will push the pair towards 2.1132(38.2% fib).

• Strong support is seen at 2.0806 (50% fib) and break below could take the pair towards 2.0639 (SMA 20).

Recommendation: Good to buy  on  around 2.0900, with stop loss of 2.0760  and target price of 2.1000