GBPAUD Mean-Reversion Lower, Tactical Aligns to Cyclical | Research

Tactical (1-3m+ outlook) and cyclical (6-12m+ outlook) indicators are aligning to bet on lower GBPAUD
Our LPPL (Log Periodic Power Law) models are flagging the end of the current LPPL bubble, which is further corroborated by VP Analog and VP Fast Money.
Cyclically, the policy divergence between the UK and Australia is extreme. Historically, it has usually paid to bet on mean-reversion of extreme policy divergences.
Structurally (2-3y+ outlook), the key data is more mixed. The UK remains capital-scarce relative to Australia (supporting GBP), but the UK runs a significant current account deficit (a persistent GBP vulnerability).