• GBP/AUD strengthened on Tuesday as increased risk-appetite boosted sterling.
• Markets have rallied behind sterling as investors gained renewed confidence in the currency as the latest economic data revealed that the UK avoided a recession.
• A rally towards is 1.8777 level is possible if GBP/AUD bulls overcome resistance at 1.8702.
• Technical are strongly bullish, daily RSI is positive at 71, daily momentum studies 14 and 21 DMAs are trending up.
• Immediate resistance is located at 1.8702 (Daily high), any close above will push the pair towards 1.8777 (23.6%fib).
• Strong support is seen at 1.8622 (5DMA) and break below could take the pair towards 1.8560 (38.2%fib).
Recommendation: Good to buy on around 1.8650, with stop loss of 1.8500 target price of 1.8750
