GBP/AUD – Back to 1.9600?

GBP/AUD – Back to 1.9600?

Chart Of The Day

Fundamentals
The market be focused on both Australia and UK over the next 24 hours as AU CPI data and BoE MOC meeting both hit the global event risk docket. In Australia the RBA has made it perfectly clear that they are willing to lower rates once again if they feel that the AU economy needs further stimulus. One possible factor in easing their decision would be a low rate of inflation. The CPI data is forecast to decline and if it does the market may take that as a green light for RBA to cut rates in May.

In UK meanwhile the focus will be on tightening. With UK economy doing far better than Europe as a whole, the BoE may be ready to follow the Fed and move off the zero bound standard. The central bank is not expected to do much tomorrow especially with UK election just weeks away, but if monetary policy officials begin to discuss a QE exit, that would be viewed a pound bullish by the market.
Technicals
Technically the pair has made higher low and looks ready to run towards the 1.9600 level. A break there would open up the prospect of a much larger move towards the 2.0000 figure.

GBP/AUD – Will the Party Continue?

GBP/AUD – Will the Party Continue?

Chart Of The Day

Fundamentals

GBP/AUD has been on a tear this year as relatively steady cable and sinking Aussie have sent the cross to multi-year highs. Although AU rates still remain nearly 200 basis points higher than UK rates the absolute value does not matter. What matters in the currency market is the future value of rates and according to convention the trend is against the Aussie and towards the pound. The RBA has hinted that there will be more cuts to come while the BoE is preparing the market for eventual normalization. If this Wednesday’s AU employment data proves disappointing then the upward trend in GBP/AUD is likely to continue.

Technicals

Technically the pair is on the verge of a multi-year breakout and a move through the 1.9700 level could open a run towards the key 2.000 level. Meanwhile support rests at 1.9400 and even stronger support at 1.9000.

BKSWING – New USD/JPY and GBP/AUD Order for 11.13.2014

Swing

US retail sales are scheduled for release on Friday and based on the ICSC and Johnson redbook retail sales reports, spending should be strong. If the data beats expectations, it should be just what traders are waiting for to drive USD/JPY back above 116. To take advantage of this opportunity, we are laying out an order to buy USD/JPY at 116.35. Along these same lines, the worst performing currency today is the British pound which has been hit hard by shifting rate hike expectations. As recently as 2 months ago, the market was pricing in a February rate hike and now they are looking for tightening after October. We expect further weakness in sterling and believe that the best way to position for this is through GBP/AUD and a break below 1.80. ** Please remember we remain LONG EUR/CHF at 1.2055

1.Buy USD/JPY at 116.35

Stop at 115.75

Close 1/2 at 116.65

Close rest at 118.00

2.Sell GBP/AUD at 1.7973

Stop at 1.8033

Close 1/2 at 1.7943

Close rest at 1.7725

***Remember, if 2 orders trigger without one hitting T1 first, all other orders are canceled

GBP/AUD – 1.8000 in view?

GBP/AUD – 1.8000 in view?

Chart Of The Day

Fundamentals

The latest BoE inflation report brought bad news to pound bulls as the UK central bank lowered its inflation forecast and essentially confirmed that they are no even thinking about rising rates until H2 of 2015. That posture is likely to continue to weigh on cable as investors and speculators have no need to get long the unit for either growth or income possibilities. In Australia on the other hand the prospect of any further rate cuts appears remote and that makes the Aussie a good place to park money while the global growth situation gets resolved. Little wonder then that GBP/AUD has been under massive liquidation attack for the past few days and may see even lower prices if today’s Chinese data proves tp be in line or better assuaging any fears of further slowdown in the Middle Kingdom. Under those conditions the pair could see 1.8000 before end of the week.

Technicals

GBP/AUD has now made a triple top at the 1.8600 level and the distribution is facing a triple bottom at the 1.8100 level. A break there opens a runt to 1.8000 and only a close above 1.8300 relieves the downside pressure on the pair.

GBP/AUD – Back to the Highs?

GBP/AUD – Back to the Highs?

Chart Of The Day

Fundamentals

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.

Technicals

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.

GBP/AUD- Can 1.8200 Hold?

GBP/AUD- Can 1.8200 Hold?

Chart Of The Day

Fundamentals

One of the more interesting trades since last Friday’s NFPs has been to go long Aussie against the European currencies. After having been brutally sold for the past several months the pair is starting to base around the 8600 level and showing relative out performance against the dollar. Last night’s neutral RBA announcement only boosted the unit since it reaffirmed the fact that AU rates will remain stationary for the time being. Meanwhile pound has been markedly weak as the pair continues to suffer under the fear that BoE will not move on rates until H2 of next year. Tomorrow should prove to be an important day for both pairs as Australian employment could offer yet another boost for Aussie and BoE rate announcement could confirm that the MPC remains resolutely dovish.

Technicals

The 1.8200 level is now the key support in the pair and a break there opens up the possibility of a run to 1.8000 while only a close above 1.8400 relieves the bearish bias.

GBP/AUD – Back to the Bottom?

GBP/AUD – Back to the Bottom?

Chart Of The Day

Fundamentals

Over the past week, no two major currencies had bigger volatility swings than cable and Aussie. The Aussie has been a victim of relentless carry trade liquidation as speculators continued to move into dollars on the assumption that the Fed will soon provide a schedule for rate hikes. The pair also suffered from weak Chinese economic data that suggested that the middle kingdom is seeing a significant slowdown in economic activity. Meanwhile, cable continues to oscillate like a yo yo with every new poll on the Scottish independence referendum. Today however we saw major changes in market sentiment. First WSJ Jon Hilsenrath reported that the Fed may not signal a hawkish bias just yet and at the same time the PBOC announced a 500 Billion yuan liquidity program that sent Aussie soaring to 9100 handle. In UK on the other hand the polls show the Yes vote uncomfortably close and that suggests that pound may be in for rollercoaster ride. In short if the Fed remains stationary tomorrow and the Scots decide to secede GBP/AUD may be setting up for a massive flush as it targets recent lows at 1.7200.

Technicals

GBP/AUD appears to have topped out at the 1.8000 level and the pair now looks headed lower with 1.7500 the first level for shorts. A move below could target the recent lows at 1.7200 while only a move back above the 1.8000 figure relieves the bearish bias in the pair.

GBP/AUD – Double Top at 1.8400?

GBP/AUD – Double Top at 1.8400?

Chart Of The Day

Fundamentals

Last week the market loved pounds and hated Aussie but the sentiment may be starting to turn as the new week begins. The Aussie was hammered by weak Trade and Retail Sales data and dovish commentary out of RBA. But despite their jawboning, its doubtful that Australian monetary authorities will do anything to the interest curve which continues to support the Australian dollar. This week we have already seen better data out of Australia with PMI Construction rising above 50 for the first time in many months and job advertizements improving which should provide support for Aussie. Meanwhile cable appears to have hit a wall ahead of the 1.7200 level and looks ready to enter its periodic correction of the uptrend. Unless today MP/IP UK data proves exceedingly strong, cable is likely to consolidate further and that is likely to drag GBP/AUD lower.

Technicals

Technically GBP/AUD has hit a clear resistance ahead of the 1.8400 level and is in the process of establishing a double top. A move through 1.8400 would re-instate the upward trend while a move below 1.8000 would suggest that a much deeper correction is in store.

GBP/AUD Aiming for 1.83

GBP/AUD Aiming for 1.83

Chart Of The Day

Fundamentals

Between the new high in sterling and the steep decline in the Australian dollar, we have seen a very nice rally in GBP/AUD this week. Tomorrow the ECB monetary policy announcement and the Non-Farm Payrolls report will be center focus but given the right conditions GBP/AUD could also be a big mover AND more likely a big winner. This week, further improvements in U.K. data drove the British pound to fresh highs. According to the latest PMI report, construction sector activity expanded at its strongest pace in 4 months. This follows similar strength in manufacturing activity. While the central bank left the market confused about their willingness to raise rates, the numbers don’t lie and the latest economic reports is just the evidence that investors needed to solidify their belief that the central bank will be growing more hawkish in the coming months. The PMI services index is scheduled for release tomorrow and if service sector activity also accelerates, GBP/AUD could soar towards 1.83. In contrast, the 30% decline in iron ore prices this year is finally catching up to economy. In the month of May, Australia’s trade deficit hit 1.9 trillion, six times worse than expected. This was the largest trade deficit for Australia in 18 months. AUD will remain in focus over the next 24 hours with retail sales and the non-manufacturing PMI report scheduled for release. If service sector activity contracts alongside manufacturing it will put additional pressure on AUD.

Technicals

Taking a look at the daily chart of GBPAUD, the currency pair is still in consolidation mode. However if it breaks above 1.8200, it should be clear sailing to 1.83, the 38.2% Fibonacci retracement of the 2014 decline. Our call for GBP/AUD is based primarily on fundamentals but support for the currency pair is at 1.80.

GBP/AUD – Will it Break 1.7700?

GBP/AUD – Will it Break 1.7700?

Chart Of The Day

Fundamentals

Cable has been in a correction mode for the better part of the week as markets are beginning to question the prospect of early BOE rate hikes despite the booming UK economy. One nagging issue is the possibility of secession of Scotland which could wreak havoc with BoE’s well laid plans. Another growing concern is the weakening UK housing market which reduces the need for BoE to act sooner rather than later. This week we get a slew of UK PMI data and although no one anticipates contractionary readings, the strong prospect of slowdown in activity could only reinforce the negative sentiment toward sterling. On the other hand the Aussie has been relatively robust holding bid above the 9200 level. This week the market will also get a glimpse of a smattering of Australian data and its provides steady results the sentiment towards Aussie will only strengthen setting up the prospect of further downside action on GBP/AUD.

Technicals

Technically GBP/AUD is approaching key support at the 1.7800 level as its corrective action accelerates. A move through 1.7800 opens the prospect of test of double bottom and a run through 1.7700 which would break the support and target the pair towards the 1.7500 figure