New lockdown measures in Australia weighed on the Aussie while stimulus prospects supported the pound during the Asian session.
Will these themes push GBP/AUD above a key resistance in the next few hours?
Before we look at GBP/AUD’s setup, check out the Asian session headlines that you might have missed:
Fresh Market Headlines & Economic Data:
- Melbourne returns to lockdown as cases surge
- Australia’s Treasurer signals ‘income support’ to avoid September cliff
- China opens Hong Kong security agency headquarters
- Coronavirus spurs Japan bank lending at record pace in June
- Crude oil price drops as US inventory build-up stokes supply fears
- UK’s Sunak to map out next moves in COVID recovery plan
- Johnson tells Merkel U.K. is ready to go without an EU trade deal
- Asian shares waver with coronavirus, corporate earnings in focus
Upcoming Potential Catalysts on the Economic Calendar:
- EU’s economic forecasts (London session)
- U.K. Chancellor Rishi Sunak to unveil new tax and spending measures (London session)
- Economy Watchers sentiment at 5:00 am GMT
- Switzerland’s unemployment rate at 5:45 am GMT
- EIA’s crude oil inventories at 2:30 pm GMT
What to Watch: GBP/AUD
With no major economic release on tap, traders will continue to focus on coronavirus measures and their impact on economic recovery.
Melbourne, Australia’s second-most populous city, will be placed in a six-week lockdown that will affect about five million residents and likely make another dent on the country’s economic recovery.On the other side of the trade, U.K.’s Chancellor Sunak is expected to announce tax and spending measures that would soften the pandemic’s impact on the economy.
If today’s stimulus measures satisfy market players enough to shrug off no-deal Brexit concerns, then we could see GBP/AUD break above the key 1.8100 handle and revisit areas of interest just under 1.8200.
If we see a “buy the rumor, sell the news” scenario, however, or if comdoll bulls get back in the game today, then GBP/AUD’s range resistance could hold and the pair could drop back down to 1.8000 near the 100 and 200 SMAs.