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We’re checking out a potential resistance retest on GBP/AUD with both economic updates and central bank commentary scheduled from both the U.K. and Australia ahead.

Before moving on, ICYMI, today’s Daily U.S. Session Watchlist looked at a technical setup on USD/JPY, so be sure to check that out to see if there is still a potential play!

Intermarket Update:

Equity Markets Bond Yields Commodities & Crypto
DAX: 15690.59 +0.88%
FTSE: 7087.55 +0.21%
S&P 500: 4291.80 +0.03%
NASDAQ: 14528.33 +019%
US 10-YR: 1.475% -0.003
Bund 10-YR: -0.173% -0.001
UK 10-YR: 0.739% -0.001
JPN 10-YR: 0.069% +0.004
Oil: 73.44 +0.72%
Gold: 1,761.60 -1.07%
Bitcoin: $36,209.14 +5.05%
Ethereum: $2,208.79 +4.38%

Fresh Market Headlines & Economic Data:

Stocks close little changed despite strong readings for home prices and consumer confidence

U.S. home prices rose in April at fastest pace in 15 years – S&P/Case-Shiller

U.S. consumer confidence at 16-month high; house price inflation heating up

Oil steadies as OPEC fuels demand hopes amid new COVID-19 worries

With the more contagious Delta variant, some officials are issuing new mask guidance

German Inflation rate expected to be +2.3% m/m in June 2021

UK mortgage approvals rise by record 827% as stamp duty holiday deadline looms

UK house prices rise at fastest rate since 2004 amid stamp duty rush

South Korea’s deputy prime minister raises concerns over volatility in cryptocurrency

Upcoming Potential Catalysts on the Economic Calendar

RBA Governor Lowe speech at 11:15 pm GMT
Japan Industrial Production at 11:50 pm GMT
China Manufacturing PMI at 1:00 am GMT (June 30)
Australia Private Sector Credit at 1:30 am GMT (June 30)
Japan Consumer Confidence at 5:00 am GMT (June 30)
U.K. GDP, Current Account, Business Investment at 6:00 am GMT (June 30)
France Inflation Rate at 6:45 am GMT (June 30)
Germany Unemployment Rate at 7:55 am GMT (June 30)
Italy PPI at 8:00 am GMT (June 30)
Euro area Inflation Rate at 9:00 am GMT (June 30)
Italy Inflation Rate at 9:00 am GMT (June 30)
Bank of England Haldane speech at 11:00 am GMT (June 30)

What to Watch: GBP/AUD

GBP/AUD 1-Hour Forex Chart
GBP/AUD 1-Hour Forex Chart

On the one-hour chart above of GBP/AUD, we can see the market is currently bullish over the last two sessions after failing to break below the previous swing low / consolidation area between the 1.8250 – 1.8300 handles. This maintains the longer-term trend that the pair has been since the beginning of 2021, with the next potential pivot point coming at the previous swing high area around the 1.8500 major psychological level.

Whether it breaks or not may be determined by what we may see in the upcoming round of economic updates for both the U.K. and Australia, which includes a potential catalyst in U.K. GDP, and speeches from both central bank governors. And we may see a possible “x factor” with China’s PMI update as it may be a potential influence on the Aussie dollar given Australia and China’s close trade ties.

For the upcoming session, we think that unless we get a major surprise from the economic updates and/or speeches, 1.8500 would be a tough nut to crack in the short-term. A retest there without a majorly bullish update from the U.K./bearish update from Australia is likely to draw in more sellers/profit takers of the recent rally higher. We’ll be on the look out for bearish reversal candles in this scenario, especially if we see a surprise tick higher in Chinese manufacturing PMI data.

If that scenario plays out and GBP/AUD moves lower, it would likely be a limited one given the overall bullish uptrend, and the bulls may step back in quickly on a retest of the previous swing low area around 1.8300.