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GBP/AUD – Will the Party Continue?
GBP/AUD has been on a tear this year as relatively steady cable and sinking Aussie have sent the cross to multi-year highs. Although AU rates still remain nearly 200 basis points higher than UK rates the absolute value does not matter. What matters in the currency market is the future value of rates and according to convention the trend is against the Aussie and towards the pound. The RBA has hinted that there will be more cuts to come while the BoE is preparing the market for eventual normalization. If this Wednesday’s AU employment data proves disappointing then the upward trend in GBP/AUD is likely to continue.
Technically the pair is on the verge of a multi-year breakout and a move through the 1.9700 level could open a run towards the key 2.000 level. Meanwhile support rests at 1.9400 and even stronger support at 1.9000.