Missed the pound bloodbath earlier this week?
I’m seeing this opportunity to hop in on a bearish GBP/AUD pullback!
Before moving on, ICYMI, yesterday’s watchlist looked at GBP/NZD’s correction levels after the pound’s flash crash. Be sure to check out if it’s still a valid play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
BOE says they’re monitoring developments in financial markets closely
Fed official Bostic: Market reaction to U.K. fiscal plan is due to rising uncertainty
Fed official Mester: More rate hikes needed, policy to stay restrictiveFed official Collins: Some global supply chain issues beginning to fade, inflation likely peaked or almost peaking
ECB head Lagarde: Quantitative tightening to be considered after rate normalization
Lagarde: ECB to take more measures if inflation is not contained
RBNZ head Orr: Tightening cycle almost done, but still some work to do
World Bank lowered economic growth forecasts for China
Japanese FinMin Suzuki: Will continue to monitor FX market
BOJ makes another unscheduled JGB buying operation
Upcoming Potential Catalysts on the Forex Economic Calendar:
Fed head Powell’s speech at 11:30 am GMT
U.S. headline and core durable goods orders at 12:30 pm GMT
FOMC member Bullard’s speech at 1:55 pm GMT
U.S. CB consumer confidence index at 2:00 pm GMT
U.S. new home sales at 2:00 pm GMT
U.S. Richmond manufacturing index at 2:00 pm GMT
BOJ monetary policy meeting minutes at 11:50 pm GMT
New Zealand ANZ business confidence index at 12:00 am GMT (Sept. 28)
Australian retail sales at 1:30 am GMT (Sept. 28)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: GBP/AUD
I’ve still got my eye on pound pairs for today since I’m on the lookout for opportunities to catch another wave lower.
GBP/AUD is in correction mode and looks ready to resume the drop, as the 61.8% Fib level is keeping gains in check. If sellers return right here, the pair might crawl back down to the swing low below the 1.6000 major psychological mark.Stochastic has a bit more room to climb before reaching the overbought area, though, so the pullback could reach higher levels.
The next potential resistance is located at the 1.6900 area, which is in line with a former support zone spanned by the dynamic inflection points at the moving averages.
The 100 SMA is below the 200 SMA to suggest that the path of least resistance is to the downside or that there’s a pretty good chance pound bears will spring back to action soon.
There are no major reports due from the U.K. in the London session, and it looks like the BOE’s efforts to calm markets down didn’t do much.
Meanwhile, the Australian retail sales report is coming up in the next Asian trading session, so we might just see more volatility for this pair then.