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This textbook technical setup on price action and the top tier catalysts on the way from both the U.K. & Australia make GBP/AUD the top pair to watch for the session.

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Fresh Market Headlines & Economic data:

Upcoming Potential Catalysts on the Forex Calendar:

  • U.S. Federal Reserve Beige  Book at 7:00 pm GMT
  • Japan trade balance at 12:50 am GMT (July 18)
  • Australia employment & NAB business confidence at 2:30 am GMT (July 18)
  • Swiss trade balance at 7:00 am GMT (July 18)
  • U.K. retail sales at 9:30 am GMT (July 18)
  • U.S. Philly Fed survey at 1:30 pm GMT (July 18)
  • Canada ADP June Payroll estimates at 1:30 pm GMT (July 18)

What to Watch: GBP/AUD

GBP/AUD 1-Hour Forex Chart
GBP/AUD 1-Hour Forex Chart

GBP/AUD has been on a wild ride lower over the past week, but buyers seemed to have found a bottom around the 1.7700 handle, and even have enough to push the pair higher in the past session. Is this another opportunity for the bears to hop in the trend at a better price?

It’s tough to tell, especially since we’ve got major potential catalysts on the way, first the monthly Australian jobs data during the upcoming Asia session, then U.K. retail sales data in the upcoming London trading session. So, the next move is likely to be based on those data points, and/or fresh updates from the geopolitical front, specifically any Brexit or U.S.-China trade war news.

For the bears, the current price action is in your favor, and if the pair can make it up to the broken support (around 1.7850 – 1.7900) before the upcoming catalysts, then it’s a high probability short idea if U.K. data disappoints while Australia data surprises positive, and we see bearish reversal patterns around the Fib area.

For the bulls, it’ll likely take both a negative jobs read from Australia and surprise positive read from the U.K. to get this pair back in rally mode, and if that situation develops, look for a break, retest, and hold of the  1.7900 handle before considering a long position. If you are long biased and this scenario plays out, there is room to run to the upside as the next resistance area is likely the 1.8000 handle, which is close to the daily ATR range of 110 pips for GBP/AUD.