Australia just released another stronger-than-expected jobs report.
Could this be enough to spur a double top break for GBP/AUD?
Before moving on, ICYMI, yesterday’s watchlist checked out USD/CAD’s trend channel ahead of Canada’s CPI release. Be sure to check out if it’s still a valid trade!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
PBOC cut lending rates to boost credit supply and growth
Australian economy added 64.8K jobs in Dec. vs. 60K forecast, 366.1K previous
Australia’s jobless rate improved from 4.6% to 4.2% vs. 4.5% consensus
Australian MI inflation expectations dipped from 4.8% to 4.4%
New Zealand PM says restrictions could be tightened again on community transmission of Omicron
U.K. RICS house price balance dipped from 71% to 69% as expected
API revealed crude oil stockpiles rose by 1.4 million barrels
ECB head Lagarde: No reason for us to act the same way as Fed
German producer prices jumped 5.0% vs. projected 0.8% uptick
Eurozone final headline CPI unchanged at 5.0%, core CPI at 2.6%
Upcoming Potential Catalysts on the Forex Economic Calendar:
ECB monetary policy meeting accounts at 12:30 pm GMT
Canadian ADP non-farm employment report at 1:30 pm GMT
Philly Fed manufacturing index at 1:30 pm GMT
U.S. initial jobless claims at 1:30 pm GMT
U.S. EIA crude oil inventories at 4:00 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: GBP/AUD
There’s not much in the way of top-tier releases during the U.S. session, so I’ll turn my attention to this AUD pair instead.
You see, I’m bullish on the Aussie at the moment since the Land Down Under just posted an upside surprise for its December jobs report.
This could mean more gains for the Australian currency up ahead, possibly leading to a double top neckline breakdown for GBP/AUD.
Price is already hovering around the support area at 1.8800, and a downside break would confirm that a reversal from the previous trend is in order. Now I wouldn’t want to miss this one since it could trigger a selloff that’s the same height as the chart pattern. That’s close to 200 pips!
I’m still a bit wary of Stochastic turning higher from the oversold region because this suggests that buyers could return to defend the floor. Also, the moving averages aren’t providing strong directional clues at the moment.
If support holds, GBP/AUD could make its way back to the resistance near the 1.9000 major psychological mark.
Where do you guys think this pair is headed next?
