AUDGBP retreat today after the news that the state of Victoria is considering a four-week new lockdown amid a rising number in coronavirus cases. The cautious tone from the RBA also weighs on the Australian dollar today.
RBA Keeps Interest Rates Unchanged
Reserve Bank of Australia kept interest rates unchanged at 0.25% matching analyst’s expectations. The central bank has cut 17 times the interest rates since November 2011 with the interest rate reduced from 4.75%. The central bank noted that the outlook remains uncertain and the recovery is expected to be bumpy, but the conditions have stabilised recently, and the downturn has been less severe than previous estimates. With the Australian economy experiencing the biggest contraction since the 1930s, RBA reiterated that it is likely that fiscal and monetary support will be required for some time.
The economic data from Australia show some sign of improvement. The Australian GDP contracted by 0.3% in the first quarter marking the first fall in output in 9 years. The ANZ-Roy Morgan consumer confidence index fell by 1% to a two month low of 92.1 last week. The jobless rate rose from 6.2% to near 19-year highs of 7.1% in May.
On the other side of the fx equation, the UK house prices fell for the fourth straight month as the United Kingdom Halifax House Prices came in at -0.1%, but beating the expectations of -0.9% in June. The pound is under selling pressure as the uncertainty around the Brexit negotiations with EU continues.
AUDGBP Price Daily Technical Analysis
AUD to GBP is 0.49% lower at 0.5555 as the pair looks capped at 0.56 mark. The rally from the April lows amid the coronavirus crisis managed to gain over 14% and now hovers close to nine-month highs. The technical outlook is bullish for the pair, and the pullbacks should be considered as a buying opportunity. Only a move below the 50-day SMA might cancel the recent positive momentum.
On the downside, first support for AUDGBP stands at 0.5551 the daily low. A move below would open the way for a test of the June 25 low at 0.5516. If bears break that level the next support will be met at 0.5461, the low from June 18.
On the contrary, the immediate resistance is at 0.5590 the daily top. Next hurdle for AUDGBP pair will be met at 0.5602 the high from September 9, 2019. A break above would challenge the highs from August 1, 2019, at 0.5672.