GBP/AUD Bounces Back on Support Levels, Interest Rate Differential Remains

The British pound has been experiencing a volatile market, with prices fluctuating against the Australian dollar. In recent trading sessions, GBP/AUD has bounced back from what appears to be a support level, thanks in part to increased interest rates in the UK.

According to technical analyst Christopher Lewis, the Reserve Bank of Australia's hawkish stance is a major contributing factor to this pair's negative trend. The Australian cash rate currently sits at 4.35%, while England's rate stands at 3.75%. This interest rate differential favors the downside for GBP/AUD.

However, Lewis notes that Australia may be more exposed to global risk scenarios than the UK, which could explain why prices are bouncing back. He suggests that this pair might settle into a longer-term range between 1.94 and 1.87, with further price movement possible if the 1.90 level is broken.