With Australian, Chinese and UK economic catalysts ahead, is GBP/AUD set to break strong support or is it time to do a countertrend trade?
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Fresh Market Headlines & Economic data:
- Global Manufacturing PMI at lowest level since October 2012
- New York City Business Outlook Falls in June to 10-Year Low
- UK house price growth remained subdued in June
- UK Construction output falls at the steepest rate since April 2009
- German monthly retail sales drop, confounding expectations
- Industrial producer prices down by 0.1% in euro area; Unchanged in EU28
- ECB Policy Makers See No Rush for July Interest-Rate Cut
- RBA cuts interest rates to new low of 1pc amid slowing economy, prompting big four banks to respond
- RBA’s Lowe Signals Rate Pause While Pledging Readiness to Act
- Canadian production falls at fastest pace for three-and-a-half years
- New Zealand business confidence plunge
Upcoming Potential Catalysts on the Forex Calendar:
- Australia Services index at 11:30 pm GMT
- Japan services & composite PMI at 1:30 am GMT (July 3)
- New Zealand ANZ Commodity prices at 2:00 am GMT (July 3)
- Australia building approvals & trade balance at 2:30 am GMT (July 3)
- China Caixin services PMI at 2:45 am GMT (July 3)
- Various European services PMI starting at 7:50 am GMT (July 3)
- UK services PMI at 9:30 am GMT (July 3)
- US ADP Non-farm employment change at 1:15 pm GMT (July 3)
- US trade balance & unemployment claims at 1:30 pm GMT (July 3)
- Canada trade balance at 1:30 pm GMT (July 3)
- US ISM non-manufacturing PMI & factory orders at 3:00 pm GMT (July 3)
What to Watch: GBP/AUD

GBP/AUD has been on a tear lower since peaking around 1.8400 mid-June, but recently the bulls have managed to hold off the bears around 1.8050. But every bounce was met by strong resistance a hundred pips higher around 1.8150, so we’re current in a consolidation pattern at the moment.
Will we see more choppiness ahead? Of course, we’ll never know until we get there, but we do have some economic updates coming soon that could spark further volatility. As seen above in the the Upcoming Calendar section, Australia will be dishing out a slew of updates in the upcoming Asia session, and from China we’ll see the latest private services PMI update. And from the UK, we’ll also get the latest services PMI read during the London session, so GBP/AUD could be a mover all the way into the end of the Wednesday London trading session.
For the bulls, if the current support around 1.8050 continues to hold and we get weak Australian & Chinese economic updates, then the current trade area down to 1.8000 is likely to hold as support. Other arguments for support are the stochastic indicator signaling potentially oversold conditions, and any negative developments in the U.S.-China trade negotiation theme could lead to a weaker Australian dollar short-term.
For the bears, a break below 1.8050 is a good sign the downtrend is likely to continue, but with a load of economic sentiment updates coming soon, it’s probably prudent to wait for the economic data updates, or to at least keep a short position very small until after the updates. If a resumption of the downtrend is confirmed (1.8050 area starts to hold as resistance), then look for a move a full daily ATR move of around 110 – 120 pips as there doesn’t seem to be any near-term support at this time. This is especially the case if the U.S.-China trade rhetoric continues to improve and we see positive updates from both Australia & China during the Asia session.