GBPAUD Market Update – May 20th

As of May 20, 2025, the GBPAUD is trading around 2.0838, reflecting a cautiously bullish short-term outlook driven by both technical patterns and divergent monetary policies between the UK and Australia.

Summary:

• Trend Reversal: The pair recently rebounded from the 2.0500–2.0510 support zone, aligning with the January rally's 61.8% Fibonacci retracement. This suggests the completion of a corrective wave and the potential resumption of the broader uptrend.
• Resistance Levels: Immediate resistance is observed around 2.0688, corresponding to the 100-period moving average. A clear break above this level could lead the price toward the next key resistance zone around 2.0760.
• Chart Patterns: A symmetrical triangle pattern on the 5-minute chart indicates a bullish bias, with a breakout above 2.0732 potentially targeting 2.0745. Fundamental Drivers:
• UK Economic Outlook: The UK's Q1 GDP growth of 0.7% exceeded expectations, and inflation is projected to rise to 3.5% in Q3. This may delay further rate cuts by the Bank of England (BoE), which recently reduced the base rate to 4.25%.
• Australian Economic Outlook: The Reserve Bank of Australia (RBA) has adopted a dovish stance, with markets pricing in a 54% chance of a 50 basis point rate cut on May 20, potentially lowering the rate to 3.6%. Weak inflation, economic growth, and concerns over China's demand for Australian exports have added pressure on the AUD.

The GBPAUD pair's short-term trajectory appears cautiously bullish, supported by technical indicators and fundamental factors. A sustained move above 2.0745 could pave the way toward 2.1000, while a drop below 2.0510 may signal a bearish reversal. Traders should monitor upcoming central bank decisions and economic data releases for further direction.

GBPAUD – H4 Timeframe

On the charts, the 4-hour timeframe price action of GBPAUD is currently approaching a rally-base-drop supply zone nestled within the key levels of the Fibonacci retracement tool. In addition, a confluence of resistance trendlines, together with the SBR (Sweep Break Retest) pattern, lends a hand to the likelihood of a bearish outcome.

Analyst's Expectations: 

Direction: Bearish

Target- 2.05620

Invalidation- 2.10424

CONCLUSION

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