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Will Australia’s jobs data be enough for AUD bulls to break below GBP/AUD’s support level? Here’s a setup that I’m looking at.

Currency Snapshot:

Major Forex Pairs Performance from MarketMilk
Major Forex Pairs Performance from MarketMilk

Fresh Market Headlines & Economic Data:

Upcoming Potential Catalysts on the Forex Calendar:

  • Switzerland’s trade balance at 7:00 am GMT
  • U.K.’s retail sales data at 9:30 am GMT
  • BOE’s monetary policy decision at 12:00 pm GMT. Check out the points you need to know about the event!
  • Canada’s ADP non-farm employment change at 1:30 pm GMT
  • U.S. Philly Fed manufacturing index at 1:30 pm GMT
  • U.S. unemployment claims at 1:30 pm GMT
  • U.S. CB leading index at 3:00 pm GMT
  • U.S. existing home sales at 3:00 pm GMT

What to Watch: GBP/AUD

GBP/AUD 4-hour Forex Chart
GBP/AUD 4-hour Forex Chart

Earlier this week I talked about GBP/AUD’s uptrend on the 1-hour chart and how I’m looking at places to jump in after GBP bulls got spooked by reports of another “hard” Brexit deadline.

Turned out, GBP bears had more momentum than I thought. It helped that earlier today Australia printed much better labor market data than markets had expected.

Focus will return to the pound over the next couple of hours as the Bank of England (BOE) prints its monetary policy announcement and publishes its sentiments on the latest election results. Word around is that two members will call for a rate cut even as the majority will vote for no policy changes.

A quick look at the forex calendar tells me that the U.K. retail sales will be printed shortly before BOE’s decision. If the central bank’s decision turns out to be a non-event, then retail trading numbers (which are expected to print stronger figures in November) could dictate GBP’s intraday price moves.

If support for the pound finds new legs today, then GBP/AUD could bounce from the 1.9030 support that has been an area of interest for the bulls and bears since mid-October. Targeting the 1.9500 previous resistance level would make sense in this case.

If today’s U.K. releases fuel GBP/AUD’s downside momentum, however, then I’ll look for a break of the support level and GBP/AUD’s possible trip to the 1.8900 or 1.8750 previous areas of interest.

Since GBP/AUD’s daily volatility is around 160 pips, trading either direction would still make for decent intraweek trades.