The forex calendar is heavy with economic updates from both Australia and the U.K. today, which makes the ranging price action in GBP/AUD one to watch for a potential short-term play.
Before moving on, ICYMI, today’s Daily U.S. Session Watchlist looked at USD/JPY as it was making new highs, so be sure to check that out to see if there is still a potential play!
Intermarket Update:
Equity Markets Bond Yields Commodities & Crypto
DAX: 15826.09 +0.35%
FTSE: 7220.14 +0.83%
S&P 500: 4445.78 +020%
NASDAQ: 14763.21 -0.17% US 10-YR: 1.327% -0.015
Bund 10-YR: -0.465% -0.006
UK 10-YR: 0.581% +0.008
JPN 10-YR: 0.032% +0.01 Oil: 69.28 +1.45%
Gold: 1,753.00 +1.23%
Bitcoin: $46,460.25 +2.05%
Ethereum: $3,251.80 +3.42%
Fresh Market Headlines & Economic Data:
Dow jumps 200 points to new record after inflation report is not as bad as feared
July consumer prices jump 5.4%, but core inflation rises less than expected
Fed’s Barkin: U.S. “closing in” on taper, but could still take a few months
Fed’s Kaplan says Fed should start tapering in October – CNBC
Fed’s George says it’s time to ‘dial back the settings’ on monetary policy
Gold rises as U.S. inflation readings cool early Fed taper bets
Global Covid cases on track to add 100 million by early next year without help to poorer nations, WHO says
White House calls on OPEC to boost oil production as gasoline prices rise
Fresh U.K. Covid-19 Data Boosts Hopes That Delta Variant Can Be Held in Check
Poly netork hacker starts to return drained funds
Singapore raises 2021 economic growth forecast as Covid vaccination progresses
Upcoming Potential Catalysts on the Economic Calendar
Japan PPI at 11:50 pm GMT
Australia Consumer Inflation Expectations at 1:00 am GMT
Australia New Home Sales at 4:00 am GMT (Aug. 12)
U.K. Trade Balance, GDP, Manufacturing Production at 6:00 am GMT (Aug. 12)
Italy Trade Balance at 8:00 am GMT (Aug. 12)
Euro Area Industrial Production at 9:00 am GMT (Aug. 12)
If you’re not familiar with the forex market’s main trading sessions, check out our Forex Market Hours tool.
What to Watch: GBP/AUD
Over the past couple of weeks, GBP/AUD has been trading sideways, steadily finding sellers just above the 1.8900 handle and buyers right around the 1.8780 handle.
Currently, the market is retesting the bottom of that range, and it looks like buyers could be back in control as technical signals start to show that the longer-term trend higher ain’t changing anytime soon. On the one hour chart above, we’ve got a bullish divergence pattern forming as the market retests 1.8780, and all we’ve got to wait for now is bullish reversal patterns to emerge.
But all of that is likely to depend on a somewhat heavy calendar ahead for both the Australian dollar and British pound. New home sales and consumer inflation expectations are strong economic indicators to watch from Australia, while from the U.K., we’ve got potentially sentiment hitting events like GDP, trade balance, and manufacturing/industrial production data.
With the market in a longer-term uptrend and the U.K. steadily recovering from the pandemic at the moment, we’re looking out for a bullish setup on the pair if 1.8800 holds as support and we see better-than-expected U.K. results against a disappointing round of updates from Australia.
With a daily Average True Range of around 100 pips, traders could take the market back to the 1.8900 handle within a session or two, especially if broad risk sentiment leans negative, usually favoring Sterling over the Aussie in that environment.
