GBPAUD has been cruising higher with rising lows and rising highs inside an ascending trend channel on its hourly time frame. Price just bounced off the top and looks due for a pullback to nearby support zones.

The 38.2% Fib is at 2.0525 near the 100 SMA dynamic support while the 50% Fib is at the middle of the channel and near the 2.0500 major psychological level. A larger pullback could reach the 61.8% Fib at 2.0448 or the channel bottom closer to 2.0400.

The 100 SMA is above the 200 SMA to suggest that the path of least resistance is to the upside or that support is more likely to hold than to break. If that’s the case, GBPAUD could resume the climb to the swing high at the 2.0650 minor psychological resistance or higher.

Stochastic is on the move down but closing in on the oversold region to reflect exhaustion among sellers soon, so turning higher would confirm that buyers are taking over. RSI has more room to slide before reaching the oversold region, so the correction could keep going until that happens.

GBPAUD could take cues from the upcoming Australian inflation release, as the results could dictate the RBA’s policy bias. Recall that the central bank signaled a more gradual approach to further easing, citing a strong jobs market and upside wage pressures. However, the latest jobs report fell short of estimates, leading traders to price in a more dovish RBA.

Expectations are for an uptick from 2.5% to 2.6% in annual headline inflation, but business PMI readings are reflecting dips in input costs that could factor in weaker consumer price pressures. Still, an upside surprise could reinforce the RBA’s policy shift and lead to gains for AUD.

Meanwhile, GBP is drawing support from a less dovish BOE announcement last week, as only one member called for a rate cut instead of the expected two.