The U.K. printed positive labor market data today.
Will it help bust GBP/AUD out of its short-term consolidation?
Before moving on, ICYMI, yesterday’s watchlist looked at EUR/JPY’s descending channel ahead of the Bank of Japan’s (BOJ) policy announcement. Be sure to check out if it’s still a valid trade!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
Businesses, consumers expect inflation above 3.0% for the next two years: BOC survey
Canada’s manufacturing sales up by 2.6% in Nov. despite flooding in B.C.BOJ raises inflation estimates from 0.9% to 1.1% in FY 2022, says risks are “generally balanced”
BOJ downgrades FY 2021 growth forecasts from 3.4% to 2.8% but upgrades FY 2022 growth from 2.9% to 3.8%
BOJ’s Kuroda: “Absolutely not thinking about raising rates or modifying our easy monetary policy”
Brent crude futures climbs above 7-year high, WTI breaks two-month highs on Mideast tensions, tight supply
UK employers add record 184K jobs in Dec.
UK unemployment rate down from 4.2% to 4.1% in Nov.
Upcoming Potential Catalysts on the Forex Economic Calendar:
Eurozone’s ZEW economic sentiment at 10:00 am GMT
Germany’s ZEW economic sentiment at 10:00 am GMT
Canada’s housing starts at 1:15 pm GMT
U.S. NY manufacturing index at 1:30 pm GMT
AU Westpac consumer price sentiment at 11:30 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: GBP/AUD
Data released earlier today showed the U.K. adding a record 184,000 jobs in December, while the unemployment rate improved from 4.2% to 4.1% in November.
Unemployment claimants also decreased by 43,300 (vs. -38,600 expected) and average earnings grew by 4.2% as expected.Meanwhile, Australia just reported a record number of COVID-19 deaths with Victoria – its second largest state – declaring an emergency for hospitals.
The positive vibes from the U.K.’s labor market data can carry over to the next trading sessions. Remember that the U.K. CPI release is around the corner and that traders are expecting the numbers to add pressure on the BOE to tighten its monetary policies further.
More GBP strength can push GBP/AUD above the 1.8975 ascending triangle resistance and into new 2022 highs.
MarketMilk’s GBP/AUD volatility charts say that the pair can move at an average of 105 pips on Tuesdays. This means bulls still have about 80 pips to go in a bullish scenario.
If markets pay more attention to the comdolls in the next trading sessions, however, then GBP/AUD’s triangle resistance may hold for another day.
A clear rejection at the resistance may drag GBP/AUD closer to the 100 and 200 SMAs on the 1-hour time frame.