GBPAUD fell through the neckline of its double bottom pattern, indicating that a reversal from the earlier uptrend is underway. Price is finding support at the 1.8835 level and might be due for a retest of the broken support.

The Fibonacci retracement tool shows where more sellers might be waiting, with the 38.2% level lining up with the former neckline at 1.8965. A larger correction could reach the 50% Fib that lines up with the moving averages and 1.9000 major psychological mark or the 61.8% Fib near the 1.9050 handle.

The 100 SMA just crossed below the 200 SMA to indicate that the path of least resistance is to the downside or that resistance levels are more likely to hold than to break. In that case, GBPAUD could resume the drop to the swing low or lower.

Stochastic is on its way up for now to show that a correction is likely and that sellers might return only when overbought conditions are met. Similarly RSI is just starting to pull up from the oversold region to suggest that buyers are returning while sellers take a break.

Both BOE Governor Bailey and RBA head Lowe have speeches coming up, and these might bring volatility for this GBPAUD pair.

Keep in mind that the BOE might be leaning closer to tightening policy more than the RBA, as Lowe previously reiterated that they’re in no rush to hike rates. Meanwhile, the BOE is under pressure to reduce stimulus and increase borrowing costs in order to keep inflation in check.

The upcoming UK GDP release might also push GBPAUD around, especially with fears of stagflation in play. Analysts are expecting another 1.1% growth figure, so an upside surprise might mean gains for the pound while a disappointing read could spur losses.