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In case you missed it, the Reserve Bank of Australia (RBA) just raised its interest rates for a ninth consecutive meeting, this time by 25 bps to 3.35% as markets had expected.

Australia’s interest rates – now 325 bps higher since the start of RBA’s rate hike program – are at their highest since September 2012.

More importantly, RBA members also noted that they expect that “further increases in interest rates will be needed over the months ahead.” Yipes!

Meanwhile, the Bank of England’s (BOE) 50bps rate hike last week came with dovish tones including dropping a pledge to “forcefully” raise rates if needed and noting that inflation has probably peaked.

It also doesn’t help that BOE’s chief economist Huw Pill just cautioned against “doing too much” given the lagging impact of rate hikes.

GBP/AUD: 4-hour

GBP/AUD 4-hour Forex Chart

GBP/AUD 4-hour Forex Chart by TradingView

The diverging central bank biases made it easy for GBP/AUD to extend its downtrend.

The pair climbed from its 2023 lows and hit 1.7540, but easily found resistance from the 100 SMA and a mid-channel zone.

Let’s see if RBA’s hawkish tone translates to intraweek uptrends for AUD.

GBP/AUD has at least 100 pips to go before reaching last week’s lows. Momentum traders can take advantage of the current selling pressure and Stochastic just leaving the overbought territory and target the 1.7225 low.

Not liking GBP/AUD’s selling levels?

You can also wait for the possibility of a spike back to Monday’s highs or even the 1.7600 inflection point after BOE MPC members like David Ramsden and Jon Cunliffe share their two cents in the next trading sessions.

This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.