The GBP/AUD exchange rate's move higher continues and our studies suggest no reason to doubt further gains are possible as there are no bearish indicators on the chart.

The pair has surpassed the 50-week moving average, which was expected to be a major impediment to upside progression. In the end it was breached relatively easily.

The exchange rate is above both the 50 and 200-day moving averages, which is a strong bullish sign.

The next major level of resistance is the major multi-year trendline at around the 1.8000 level.

The MACD momentum indicator is rising in a straight line showing the rally is aided by continued strong momentum.

A break above the 1.7377 highs would confirm a continuation higher, with the next target at 1.7500.

Australian Dollar's Week Ahead Dominated by RBA

The consensus expects a hold in policy due to the improving labour market.

TD Securities expect a modest upgrade to the Reserve Bank’s Q2 GDP forecasts but CPI forecasts to remain unchanged.

“Financial conditions are little changed since February. The RBA’s view on the recent pop in full time hours worked and employment will be our focus given the usual dour assessment to date,” say TD Securities.

The tone of the RBA's assessment will be where any movement in the currency will likely be derived.

A positive assessment of the economy could provide some support, while an unexpectedly negative assessment might hurt the Aussie Dollar.

Whatever the case, with the RBA likely to remain on hold for an extended period of time the prospect of a AUD recovery should remain a limited prospect.

The Australian Dollar has long benefited from international investor inflows seeking out the country's high interest rates.

However, with the US Federal Reserve pushing up rates this advantage is expected to diminish and the Australian Dollar is seen losing one of its key pillars of support.

Data for the Pound

These are the most timely economic data releases available and will give us a view of how the UK economy performed in April.

Both Manufacturing, on Tuesday at 9.30 BST, and Construction, out on Wednesday at the same time, are forecast to fall by two basis points to 54.0 and 52.0 respectively.

Services, out on Thursday at 9.30, is expected to fall more steeply to 54.5 from 55.0 previously.

The recent downturn in UK economic activity means markets will be watching whether the trend continues with PMIs.

“Markets are looking for a bit of a pull-back in the PMI’s, and we’re just modestly more optimistic on balance,” said TD Securities in a review of the week ahead.

We doubt that disappointment will feed into any sustained pressure on Sterling though as the currency appears to be more concerned with global investor dynamics and domestic politics at present.