GBP/AUD reversal in play ahead of BoE and RBA

With RBA and BoE set to come back into the fold, GBP/AUD looks to have provided a bullish reversal signal

RBA and BoE unlikely to bring fresh easing

GBP/AUD coming into focus this week as both the BoE and RBA get set to release their latest monetary policy decision. Neither are expected to provide any significant change to rates or QE programmes, with most central banks holding off as we enter a very sensitive period for the economic recovery. Coming off the back of a significant decline in the pair, we have finally seen a potential turning point after seeing the break through 1.8202 resistance. That brings an end to the trend of lower high is that has been in play since the March peak. This is the first signal that we could be reversing higher from here.

On the weekly chart see another potential turning point, with the recent decline moving into but not below the key 1.7561 low from July 2019. A break below the level would have brought about an end to the wider long-term uptrend. However, with price turning higher there is a chance we will see the pair reverse to continue this long-term bull market. The stochastic looks set to breakthrough the 20 threshold, which has previously provided us with useful buying opportunities as highlighted but the vertical lines. As such, a bullish outlook is in play here, with a break back below the recent low of 1.7695.

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