AUD to GBP Bullish Momentum After Record UK GDP Contraction
AUD to GBP managed to rebound from the 100-day moving average on Monday, while yesterday managed to cross also the 50-day moving average. Earlier today the ONS announced a record contraction in UK GDP, while the Bank of England’s economist, Haldane downplayed the possibility of negative rates in the UK as none of the conditions has been satisfied. The UK economy shrank by 19.8% in the 2Q, the deepest contraction in history. The first estimate was for -20.4% contraction, while the market consensus was for a contraction of 21.7%. On the yearly base, the contraction was at 21.5% below the expectations of -21.7%. The Services sectors contracted by 19.2% while the construction output shrink by 35.7% and production output drop by 16.3%.
The housing sector continues to improve. The UK Nationwide Housing Prices picked up to 5%, topping the estimates of 4.5% in September marking the highest reading since 2016. The monthly Housing Prices registered in at 0.9% following a 2% rise in the previous month.
Australian dollar boosted today by better than expected manufacturing PMI data from China which is the main trading partner of Australia. On the other hand, In Australia, the Building Permits in August came in at -1.6%, below the market consensus of 0%, the yearly Building Permits registered in at 0.6%, below the 6.3% reading in July.
AUD to GBP Technical Analysis
AUD to GBP is 0.01% lower today at 0.5548, keeping the positive momentum as it holds above the 50-day moving average. Bulls are back in the pair as the correction from the 0.57 highs met strong support at the 100-day moving average. The pair spent just one day below the 100-day moving average as the bulls quickly managed to regain that level.
Resistance for the pair is at 0.5559 the daily high. The next hurdle would be met at 0.5635 the top from September 23. If the pair breaks that resistance then the next target would be 0.5671 the high from September 21.
On the other side, support for AUDGBP would be met at 0.5535 – 0.5531 area the daily lows and the 50-day moving average. The next critical support for the pair is at 0.5510 the 100-day moving average. A break below would attract more sellers, targeting 0.5468 the low from September 28.