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GBP/AUD – 1.8000 in view?
The latest BoE inflation report brought bad news to pound bulls as the UK central bank lowered its inflation forecast and essentially confirmed that they are no even thinking about rising rates until H2 of 2015. That posture is likely to continue to weigh on cable as investors and speculators have no need to get long the unit for either growth or income possibilities. In Australia on the other hand the prospect of any further rate cuts appears remote and that makes the Aussie a good place to park money while the global growth situation gets resolved. Little wonder then that GBP/AUD has been under massive liquidation attack for the past few days and may see even lower prices if today’s Chinese data proves tp be in line or better assuaging any fears of further slowdown in the Middle Kingdom. Under those conditions the pair could see 1.8000 before end of the week.
GBP/AUD has now made a triple top at the 1.8600 level and the distribution is facing a triple bottom at the 1.8100 level. A break there opens a runt to 1.8000 and only a close above 1.8300 relieves the downside pressure on the pair.