There are no top-tier reports due in the next trading sessions, so I’ll just keep tabs on this neat technical play on GBP/AUD.
Are we about to see a bounce off this major support area soon?
Before moving on, ICYMI, today’s Daily Asia-London Session Watchlist looked at EUR/JPY setting its sights on the channel support ahead of low-tier releases. Be sure to check that out to see if there is still a potential play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
- Japanese gov’t considering retightening COVID-19 restrictions
- South Korea reports fresh surge in COVID-19 cases
- New Zealand suspends entry for travelers from India due to surge in cases
- Crude oil takes hits on surge in gasoline inventories
- U.K. RICS house price balance up from 54% to 59%
- Japanese current account surplus widened from 1.50T JPY to 1.79T JPY
- New Zealand ANZ consumer confidence slumped from -4.1 to -8.4
Upcoming Potential Catalysts on the Economic Calendar:
- ECB monetary policy meeting minutes at 12:30 pm GMT
- U.S. initial jobless claims at 1:30 pm GMT
- Fed head Powell’s speech at 5:00 pm GMT
What to Watch: GBP/AUD
This pair is trending higher on the short-term time frame, cruising inside an ascending channel with its higher highs and higher lows.
Price appears to be finding support at the 50% Fib level that lines up with the 100 SMA dynamic inflection point. This moving average is above the 200 SMA to confirm that buyers have the upper hand.A larger correction might still reach the 61.8% Fib, which is closer to the channel bottom and 1.8000 major psychological support. Stochastic is already starting to pull up, though, so price could follow suit as bullish pressure picks up.
There are no major reports due from the U.K. economy, but the optimism for the easing of lockdown restrictions next week and its positive effect on businesses might be enough to keep sterling afloat.
Meanwhile, a return in risk aversion is possible now that several countries like South Korea are reporting another surge in COVID-19 cases and considering fresh lockdown measures.
This could be bearish for the higher-yielding Australian dollar, which tends to sell off while traders seek lower-yielding safe-haven currencies.