More volatility may be coming for GBP/AUD we’ll see economic updates from both Australia and the U.K., which could possibly take today’s spike lower even further or draw in traders to fade the move. Let’s take a look.
Before moving on, ICYMI, today’s Daily U.S. Session Watchlist looked at the rising wedge in GBP/USD, so be sure to check that out to see if there is still a potential play!
Intermarket Update:
Equity Markets Bond Yields Commodities & Crypto
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NASDAQ: 14486.20 -0.64% US 10-YR: 1.612% +0.041
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Fresh Market Headlines & Economic Data:
Fed’s Daly says covid pushing prices up but impact shoudl fade
ECB’s Knot warns investors of risks of higher inflation
BOE’s Saunders seen pushing for bigger-than-expected rate hike
Turkish Lira slides to record low on rising tensions, rate cut
Oil settles up 1.5%; hits multi-year highs on surging demand
U.S. natgas falls 4% to 2-week low on mild weather, rising output
U.S. moves closer to clearing Moderna and J&J Covid booster shots this week
AstraZeneca antibody cocktail study shows success treating COVID-19
Bitcoin network tags record high for daily settlement volume
Upcoming Potential Catalysts on the Economic Calendar
New Zealand Visitor Arrivals at 9:45 pm GMT
Japan PPI at 11:50 pm GMT
Australia New Home Sales at 12:00 am GMT (Oct. 12)
Australia Business Confidence at 12:30 am GMT (Oct. 12)
Bank of Korea Interest Rate decision at 1:00 am GMT (Oct. 12)
Germany Wholesale Prices at 6:00 am GMT (Oct. 12)
U.K. Claimant Count Change, Unemployment Rate at 6:00 am GMT (Oct. 12)
ZEW Economic Sentiment at 9:00 am GMT (Oct. 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
On the one hour chart above of GBP/AUD, we can see the market spiking lower after breaking the major support area around the 1.8600 major psychological level. After an over 100 pip drop, it looks like the move has run out of steam, which now begs the question of whether we’ve got a bounce ahead or will the dip continue right away?
Well, we’ve got potential catalysts for the pair coming in the form of economic updates from both Australia and the U.K. The latest employment update from the U.K. is likely to be a short-term driver for Sterling, while Australia’s business sentiment and housing data may have a chance of moving the Aussie if we get a big enough surprise.
With the market solidly in a downtrend after starting a new leg lower in its recent bearish reversal from the August top around 1.9100, we’ll be leaning bearish on the pair for now and looking for an opportunity to short if the market does bounce higher. If we see traders pushing the pair up to the broken major support area/psychological level of 1.8600, then we’ll be on the lookout for bearish reversal patterns if U.K. employment data disappoints (possibly reducing BOE rate hike odds) and better-than-expected reads from Australia.
Now, if we get an opposite scenario play out with the economic data (i.e., positive U.K. jobs data vs. disappointing Aussie data), then this could lead to a short-term bounce, but we’re less likely to short at 1.8600 for now. We’ll just stay in watch mode to see how the market reacts to that area over the course of the week.
