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GBP/AUD Big Trade +118
Big Trade Update Close GBPAUD at market 1.9750 +118 on trade we will reload later
GBP/AUD Big Trade
Place order to SELL GBP/AUD at 1.9870
**If first entry is TRIGGERED, another order will follow
Stop at 2.0075
The Australian dollar is in play for the next 24 to 48 hours with the Reserve Bank gearing up for its monthly monetary policy meeting. We believe that the RBA will leave rates unchanged, paving the way for a rebound in the Australian dollar. In the past 2 weeks, AUD has fallen quickly and aggressively, dropping from a high of 0.8160 to 0.7598. 0.7533 is the 6 year low for AUD/USD. We believe that this slide in the currency along with mixed economic reports will make the RBA less worried about exchange risks and more comfortable with the current level of monetary policy. If we are right, AUD should trade higher and enjoy a much needed relief rally. We have chosen to buy AUD versus the pound because seven straight trading days have past without a rally in the currency. Sterling is oversold and while today’s PMI manufacturing report fell short of expectations, manufacturing activity still increased from the previous month so the outlook is not that grim but unless there is an upside surprise in the data, the fear of a BREXIT (UK leaving the EU could still hang over the currency). The service sector also seems to be holding up better but if this week’s PMI Services data misses, sterling could extend its losses.
Technically, 2.0 should be pretty stiff resistance for GBP/AUD. We have chosen to SELL GBP/AUD on a break lower instead of at market because we don’t want to be in the trade if the RBA says they still plan to lower rates this year.