FxWirePro: GBP/AUD loses momentum but outlook is bullish
• GBP/AUD initially gained on Monday but rally fizzled as Russia-Ukraine tensions usurped focus on expected BoE rate hike.
• Investors expect the Bank of England to hike rates in February, after data showed on Wednesday that UK inflation rose faster than expected to its highest in nearly 30 years in December.
• Any downside correction is likely to be temporary as barrier at 1.8802 (50%fib) is set to restricting lower move.
• Technical signals are bullish as RSI is at 58, daily momentum studies 5 , 11 and 14 DMA’s are trending up.
• Immediate resistance is located at 1.8908 (38.2%fib ), any close above will push the pair towards 1.8969 (June 24th high).
• Strong support is seen at 1.8862 (5 DMA) and break below could take the pair towards 1.8802 (50%fib).
Recommendation: Good to buy on dips around 1.8860 with stop loss of 1.8800 and target price of 1.8970.