Australia and the U.K. have some top tier economic events coming our way, which makes the volatile range in GBP/AUD one to watch for the next session or two.
Intermarket Snapshot
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Fresh Market Headlines & Economic data:
- Oil slips to $67 as economy concern counters OPEC cuts
- Proposed Trump-Xi summit to end trade war may be pushed back to June
- Theresa May in last-minute talks with DUP to unlock votes
- Worth Giving Time to Reach Brexit Deal: German Foreign Minister
- BCC Forecast: UK economy to falter further as Brexit uncertainty bites
- No new vote on May’s deal without DUP support – chancellor
- BOJ Gets Extra Innings Just to Hit a Single
- New Zealand 2018 GDP likely to bolster case for loose monetary policy: poll
Upcoming Potential Catalysts on the Forex Calendar:
- ECB Praet Speaks in Luxembourg at 3:10 pm GMT
- New Zealand Westpac Consumer Sentiment at 8:00 pm GMT
- RBA Monetary Policy Meeting Minutes at 12:30 am GMT (Mar. 19)
- Australia House Price Index at 12:30 am GMT (Mar. 19)
- U.K. claimant count Change at 9:30 am GMT (Mar.19)
What to Watch: GBP/AUD
In the upcoming catalysts section above, we can see that we’ve got potential market moving catalysts for GBP/AUD in the form of the RBA meeting minutes, Australia housing, and U.K. unemployment data. These reports have a pretty good chance of of sparking a move in GBP/AUD for the next session or two, so let’s look at the chart to see where the bulls and bears could play any rise in volatility.
For the bears, your opportunity may be right now as GBP/AUD retested and failed the top of the March range, which is around 1.8700 – 1.8800. The pair has broken down to start the week’s session, likely on a pop higher in the Aussie from a spike in iron ore prices (one of Australia’s top exports to China) and possibly on sentiment that Asia’s export economy could be bouncing back after Singapore reported a rebound in exports earlier during the Asia trading session. The upcoming data could give this downmove more steam and with the recent swing lows around 1.8450, the R:R potential looks great if the data can help the bears along.
For the bulls, it might make sense to wait for a retest of the previous swing lows. These are top tier events coming up and with Brexit always in the mix to be a potential catalyst, waiting for a better price should be factored into the entry strategy. With the daily ATR of around 200 pips, that area could be reached within the next session or two, and if U.K. unemployment is positive while Australia’s housing data is negative, buyers could be eyeing that level for fresh longs.
