InstaForex

September 30, 2021

Daily Asia-London Sessions Watchlist: GBP/AUD

 GBP/AUD hits the top of the watchlist this afternoon as we’ll soon get economic updates from Australia, China and the U.K. Will the data spark enough volatility for a short-term opportunity?


Before moving on, ICYMI, today’s Daily U.S. Session Watchlist looked at a technical setup on AUD/USD ahead of central bank speak, 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: 15365.27 +0.77%

FTSE: 7108.16 +1.14%

S&P 500: 4359.49 +0.16%

NASDAQ: 14512.44 -0.24% US 10-YR: 1.527% -0.009

Bund 10-YR: -0.206% +0.007

UK 10-YR: 1.007% +0.014

JPN 10-YR: 0.075% +0.005 Oil: 74.70 -0.78%

Gold: 1,724.30 -0.76%

Bitcoin: $41,207.00 +0.39%

Ether: $2,813.30 -0.83%

Fresh Market Headlines & Economic Data:

As deadline looms, Democrats scramble to avert U.S. government shutdown


U.S. pending home sales jump to seven-month high; mortgage applications fall


Powell, Lagarde say elevated inflation will prove temporary


ECB must be ready to act if inflation entrenched, says Makhlouf



Evergrande set to miss second offshore bond coupon payment this month, sources say


Canada Industrial Product Price Index: -0.3% m/m in Aug.; Raw materials price index: -2.4% m/m


British army to start driving tankers, fuel queues persist


First cryptocurrency fund approved in Switzerland


Natural gas drops 7%, sharpest decline since January following big run-up on supply concerns


Upcoming Potential Catalysts on the Economic Calendar


New Zealand Building Consents at 9:45 pm GMT

Japan Retail Sales, Industrial Production at 11:50 pm GMT

China Manufacturing PMI at 1:00 am GMT (Sept. 30)

Australia Building Permits at 1:30 am GMT (Sept. 30)

China Caixin Manufacturing PMI at 1:45 am GMT (Sept. 30)

Japan Housing Starts, Construction Orders at 5:00 am GMT (Sept. 30)

Germany Unemployment Rate at 6:00 am GMT (Sept. 30)

U.K. Current Account, GDP at 6:00 am GMT (Sept. 30)

France Inflation Rate at 6:45 am GMT (Sept. 30)

Spain Retail Sales at 7:00 am GMT (Sept. 30)

Bank of Japan Kuroda speech at 7:10 am GMT (Sept. 30)

Euro Area Unemployment Rate at 9:00 am GMT (Sept. 30)

Italy Inflation Rate at 9:00 am GMT (Sept. 30)


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

We’ve got a steady stream of economic updates coming soon in the Asia and London session, but unfortunately most are mid-to-low tier events so the odds of a big move are pretty low. But the most notable of the bunch is the latest manufacturing PMI data from China and the latest GDP read from the U.K., making the simple chart setup in GBP/AUD above one to watch for a potential short-term play.



On the one hour chart above of GBP/AUD, we can see the pair had been in a sideways range last week before Sterling bears took over this week.  Fears of a fuel and energy crisis in the U.K. picked up, prompting traders to reduce BOE rate hike bets, which is likely why we saw GBP/AUD easily break below the bottom of the range around the 1.8770 handle.


But it looks like traders have found a bottom around the 1.8625 handle, and it didn’t take long for the market to bounce, prompting the question of whether or not this is another opportunity to short this week’s bearish bias at better prices?


Well, if we see improvements to Chinese business sentiment AND a disappointing U.K. GDP read, then today’s bounce is highly likely a good opportunity for short-term traders to consider a short play on the pair. The odds of success look good too if the market is already retesting the broken support area around 1.8770 and forms bearish reversal candles.


In the scenario that we see weak Chinese PMI data and a better-than-expected read in U.K. GDP data, then 1.8600 is the area to watch for potential bullish reversal candles before considering a long position. Keep in mind that this would be a counter-trend bias, so be cautious with this kind of trade unless we get an unforeseen catalyst(s) that significantly shifts the driving themes.