The latest BoE meeting saw the bank making some substantial upgrades to the economic outlook, and expectations are that the UK economy will grow by 6%. The latest strong rise in UK retail sales data on Friday last week indicates that the UK may even outperform this year. The strong vaccine rollout in the UK is also helping the bullish GBP sentiment.

The AUD by contrast is currently pressured alongside falling Iron ore prices. If these prices keep falling then AUD will face weakness. The Australian economy exports large amounts of Iron ore, so its price impacts the AUD.

Therefore, there is a near term buy bias of the GBPAUD as long as the price remains above this key trend line.

Key Trade Risks:

• If Iron Ore prices move a lot higher that will invalidate this outlook.
• Any negative news for the UK on a COVID-19 variant will also invalidate this outlook.