I’m keeping my eye on this pair for another trading session as resistance seems to be holding well.
A bit of risk appetite appears to be returning to the markets, allowing the Aussie to stay afloat even with a fresh set of restrictions in place.
Before we look at GBP/AUD’s setup, check out the Asian session headlines that you might have missed:
Fresh Market Headlines & Economic Data:
- U.K. RICS house price balance down 15% vs. projected 25% drop
- Japanese core machinery orders rebound by 1.7% vs. expected 5.2% slide
- New Zealand ANZ business confidence index improved from -34.4 to -29.8
- Chinese headline CPI climbed from 2.4% to 2.5% y/y as expected
- Chinese producer prices slump 3% vs. expected 3.2% drop
- More state borders being closed in Australia on resurgence of COVID-19 cases
- Asian shares turn green on positive earnings expectations
- BOJ Gov Kuroda: Economy to improve as pandemic impact subsides
Upcoming Potential Catalysts on the Economic Calendar:
- German trade balance at 7:00 am GMT
- Japanese preliminary machine tool orders at 7:00 am GMT
- Eurogroup meetings to kick off today
What to Watch: GBP/AUDupbeat figures from China had traders focusing on recovery hopes once more.
In addition, positive earnings expectations are keeping traders hungry for more risk, which could be bullish for the higher-yielding Aussie.
In that case, GBP/AUD could make its way back to the bottom of the range around the 1.7900 major psychological mark or at least until the middle at the 1.8000 handle.
Stochastic is still heading south after all, which means that sellers have the upper hand. Looking at the average daily GBP/AUD volatility suggests that the pair could move close to 150 pips for the day.