The AUD to GBP price formed a hammer pattern after the Reserve Bank of Australia (RBA) delivered the minutes of the last monetary policy meeting. The AUD/GBP pair is trading at 0.5680, which is slightly above last week’s low of 0.5657.
RBA minutes and UK inflation
The AUD to GBP pair reacted to relatively hawkish minutes by the RBA. The bank explained why it hiked interest rates by 0,50% in the past meeting. That was the second straight rate hike this year as the bank continued battling with the soaring consumer inflation. The minutes added:
“Two options for the size of the cash rate increase were considered: raising the cash rate target by 25 basis points or by 50 basis points. Members noted that both options would leave the cash rate below 1 per cent, which would still be highly stimulatory.”
The next key catalyst for the AUD/GBP price will be the upcoming UK consumer and producer inflation data scheduled for Tuesday. Analysts expect the data to show that the headline CPI rose by 9.1% in May as the price of energy continued. The core CPI is also expected to show such growth considering that the prices of most items are soaring.
The AUD to GBP price is also reacting to a major strike that will happen in the UK. Rail workers are expected to cause chaos in the next three days as they agitate for wage increases. That strike will be inflationary for the UK. Further, the pair will react to the ongoing commodity crash. In the past few days, the prices of most commodities like iron ore and copper have slumped.
AUD to GBP forecast
The four-hour chart shows that the AUD/GBP price formed a small hammer pattern. The lower side of this hammer was at 0.5656, which was the lowest level on Monday. It remains below the 25-day and 50-day moving averages. Also, the price struggled to move above this level in May.
The outlook of the AUD to GBP price is still bearish, with the next key support level being at 0.5656. A move above the key resistance at 0.5692 will invalidate the bearish view.
