Risk flow has supported the British Pound (GBP) over the past couple of weeks, the Australian Dollar (AUD) slipping from 0.5305 (1.8850) to 0.5195 (1.9260) this morning. Bank of England’s (BoE) Bailey has said the economic outlook looks “subdued” and that monetary policy is restrictive. We expect more hikes ahead, but what could determine this is tomorrow’s UK inflation read which has been ‘sticky” at best over the past couple of months. We predict a drop to 6.6% y/y down from 6.7% likely to not get the central bank overly excited. A retest to 0.5170 (1.9350) looks likely.
Current Level: 0.5188
Support: 0.5170
Resistance: 0.5280
Last week’s range: 0.5174 – 0.5250