InstaForex

October 14, 2021

Daily U.S. Session Watchlist: GBP/AUD

 Stronger than expected Chinese trade data might be enough to keep the Aussie afloat today.


Will the downtrend on GBP/AUD resume soon?


Before moving on, ICYMI, today’s Asia-London session watchlist looked at EUR/GBP for another test of a strong support level. Be sure to check out if it’s still a valid play!


And now for the headlines that rocked the markets in the last trading sessions:


Fresh Market Headlines & Economic Data:

Chinese trade surplus grew from $58.3B to $66.8B vs. $48.5B expected


Chinese iron ore imports fell 1.9% m/m on weaker demand


Chinese stocks and bonds hit again by Evergrande woes, power crunch


New Zealand ANZ business confidence index down from -7.2 to -8.6


Asian shares stumble ahead of U.S. CPI release later


Japanese PM Kishida refrains from commenting on FX movements


British Finance Minister Sunak calls on G7 to resolve supply chain issues


Upcoming Potential Catalysts on the Economic Calendar:

U.S. headline and core CPI at 12:30 pm GMT

FOMC meeting minutes at 6:00 pm GMT

FOMC member Brainard’s speech at 8:30 pm GMT

G20 meetings ongoing


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 couple of top-tier catalysts lined up from Uncle Sam today, so I’m steering clear of the dollar and its event risks.


Instead, I’m keeping a closer watch on this GBP/AUD pullback which already caught my eye earlier this week.



This time, I’m seeing even more reasons to catch a potential selloff, as the 100 SMA dynamic resistance and a falling trend line are coinciding with the area of interest at the 61.8% Fib and .8600 handle.

If this is enough to keep gains in check, the pair could tumble by roughly 150 pips down to the swing low or lower.


The 100 SMA is below the 200 SMA to confirm that the selloff is more likely to resume than to reverse while Stochastic is indicating a possible takeover by sellers.


Heck, I’m even seeing a slight bearish divergence, as GBP/AUD is forming lower highs while the oscillator made higher highs.


Sterling has been under downside pressure lately since the U.K. economy is already feeling the pinch of supply chain issues. The latest retail sales report turned out weaker than expected, keeping the threat of stagflation in play.


Meanwhile, the Aussie could regain some ground since the latest Chinese trade balance showed some green shoots.