AUD to GBP retreat today from two-month highs as the pressure to British pound ease after the strong rebound in risky assets yesterday.
The British pound outlook remains fragile as the fear for a no-deal Brexit rise after the Internal Markets Bill as we approach the October 15 deadline set by Boris Johnson.
Internal Markets Bill Increase No-Deal Brexit Fears
U.K. Parliament introduced yesterday the Internal Markets Bill which will create steps for a safety net in the case of no-deal Brexit and protect jobs in the U.K. The Bill supports the unity of the U.K. market ensuring that products and services can continue to trade between Northern Ireland and the U.K. According to some analysts, the Bill breaks international law because it overrides the Withdrawal Agreement. European Commission President Ursula von der Leyen said that Internal Markets Bill would undermine trust. U.S. warned that there is no chance of Congress to approve the U.K. – USA trade deal with if the new legislation overrides the Brexit agreement.
In our economic calendar news, Australia Consumer Inflation Expectations dropped to 3.1% in September from 3.3%. Yesterday, the Westpac Consumer Confidence rose by 18% in September to 93.8 from 79.5 in August. The Australia Home Loans in July came in at 9.7% above the expectations of 3.1%.
Aussie dollar is supported the last week from better than expected economic data from China as almost 30% of Australia’s GDP is made up of the trade with China. Rising tensions between the two countries on some wine subsidies issue would hurt AUD.
AUD to GBP Technical Analysis
AUD to GBP gives up 0.22% at 0.5591 in the first pullback after four days of gains. The outlook is bullish for AUDGBP as the previous week the pair break above the 50-day moving average.
Immediate support for AUDGBP pair stands at 0.5548 the low from yesterday’s trading session. If AUD to GBP breaks below the 50-day moving average at 0.5516, then the bullish momentum would be invalidated.
On the upside, the initial resistance would be met at 0.5614 the top from yesterday’s high. The top from July 23 would be the next hurdle for EURGBP.
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AUDGBP Daily Chart