The British Pound (GBP) ground out gains Monday off the open to extend last week’s mini rally against the Australian Dollar (AUD) to 0.5335 (1.8750). The GBP improved from the recent hawkish tone from the BoE and rate hike predictions. Recent wage data and claimant change has firmed the rate hike outlook. Profit taking post last week’s “risk rises” has been evident with the AUD falling back a tad as equities have also eased form recent highs. This week’s y/y UK CPI and official cash rate announcement is the main ticket. Interest rates are expected to be raised from 4.50% to 4.75% as they fight to conquer rising inflation. Momentum we think is to the downside in the cross this week.
Current Level: 0.5352 (1.8684)
Resistance: 0.5420 (1.9180)
Support: 0.5215 (1.8440)
Last Weeks Range: 0.5348-0.5405 (1.8499-1.8698)