AUD to GBP Continues the Correction After Weak Aussie Retail Sales
AUD to GBP hit two-week lows after disappointing Australian retail sales while the Bank of England Governor Bailey yesterday downplayed the speculations of negative interest rates in the UK.
Australia Retail Sales Disappoint
Australia Retail Sales seasonally adjusted dropped to -4.2% in August from 3.2% in July. Aussie Commonwealth Bank Manufacturing PMI came in at 55.5 in September topping the expectations of 48.3. The Commonwealth Bank Services PMI reported in at 50 also above the forecasts of 48.4, while the Composite PMI registered in at 50.5 above the previous reading of 49.4.
UK Manufacturing PMI In Line
United Kingdom preliminary Manufacturing PMI came in at 54.3 in September in line with the forecasts but below the August reading of 55.2. The UK Services PMI came in at 55.1 below the estimates of 56; the previous reading was at 58.8.
GBP picture remains fragile as concerns for a no-deal Brexit rise, even the EU negotiator Michel Barnier said earlier today that he remains determined to reach an agreement with the UK before the October 15 deadline set by Boris Johnson.
AUD to GBP Analysis
AUD to GBP is 0.45% lower at 0.5603 as the pullback that started two weeks from 20-month highs continue. The technical outlook remains bullish despite the recent correction which helped the pair to exit from the overbought territory. Pullbacks still should be considered a buying opportunity.
First support for the pair stands at 0.5578 the low from September 10. Bears need to break below the 50-day moving average at 0.5536 to cancel the positive momentum. Next support for AUDGBP would provide the 100-day moving average at 0.5497.
On the contrary, resistance for the pair stands at 0.5633 today’s high. Next hurdle for AUDUSD would be met at 0.5670 the high from September 21. A break above might challenge the 20-month highs at 0.5716.
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