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GBP/AUD – Back to the Highs?
The Australian dollar had a a few days of reprieve, but the unit is back under pressure as we start a new week and risk aversion flows grip the equity markets. Generally October is a very volatile month and that suggests the selloff could continue for another week. In the meantime, the market will get a glimpse at the Chinese trade data Sunday night and if it shows a slowdown the Aussie could get hit once again as risk aversion flows accelerate. In the meantime in UK the week also brings us a full UK calendar of event risk including inflation and employment data. If the news beats to the upside the pair could start to outperform as markets will once again focus on the prospect of expedited UK rate hikes. Therefore, GBP/AUD could make a run to fresh highs.
Technically the 1.8700 level represents the last area of resistance for GBP/AUD and a break there could open a run towards the 1.9000 level while a break below the key support of 1.82000 turns the bias bearish and opens the possibility of correction back to 1.8000.