The Pound to Australian Dollar rate (GBP/AUD) jumped notably higher in the previous week after Theresa May’s announcement to hold an election in June.

However, our studies suggest GBP/AUD has reached a level that is uncomfortably close to a resistance area that is likely to cap future progress higher.

This level is the 50-week moving average (MA) situated at 1.7156.

Moving averages are dynamic levels of support and resistance, not just indicators of long-term value, and the exchange will probably struggle to break above the MA and move substantially higher.

We, therefore, take a wait and see approach to our forecast, for although the pair is showing it is a short-term uptrend now, the 50-week MA is a formidable obstacle which could reverse the whole trend of the market.

Key Data to Watch in the Week to Come

A higher than expected result will probably lead to an appreciation of the Aussie as it will increase the chances the Reserve Bank of Australia could adopt a more hawkish tone, bring forward the time when they are expected to raise interest rates.

Such a move would be positive for the currency as the promise of higher interest rates in Australia would be expected to attract inflows of foreign capital.

Tuesday is a public holiday in Oz and PPI data (factory prices) and Private Sector Credit are both scheduled for release between 02.00 and 02.30 on Friday, April 28.

For the Pound: look out for GDP data on Friday (09.30 GMT) when the preliminary estimate for the first Quarter is released, and expected to show a slower 0.4% pace of growth compared to the previous period but an elevated 2.2% increase year-on-year (that is compared to Q1 in 2016).

We don't see the data as being likely to influence moves in Sterling considering the currency is now so dependent on overall global investor sentiment and domestic political moves.

Recall Brexit negotiations and a general election lie ahead and only the most unexpected of economic data releases will likely shift the currency.