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FxWirePro: GBP/AUD hovers near 3-month low, vulnerable to more downside

• GBP/AUD hovered near 3-month low on Tuesday as investors digested Bank of England Governor Andrew Bailey comments awaited US inflation data.

• Andrew Bailey said on Tuesday that the Bank of England’s next rate move remained uncertain and would hinge on economic and geopolitical developments.

• Bailey said investors were pricing more rate hikes than the BoE’s expected policy path warranted, with the risk premium reflecting fears of higher energy prices.

•BoE Deputy Governor Dave Ramsden ​and external ⁠MPC members Megan Greene and Alan Taylor also attended the hearing on Tuesday.

•Ramsden viewed domestic inflation risks as relatively contained, while Taylor said maintaining restrictive rates would provide a buffer against external shocks.

• Immediate resistance is located at 1.8812(Sep 4th high), any close above will push the pair towards 1.8912(38.2%fib).
 

• Immediate support is seen at 1.8745(23.6%fib) and break below could take the pair towards 1.8675(Lower BB ).

Recommendation: Good to sell around 1.8780, with stop loss of 1.8880 and target price of 1.8720

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