The GBP/AUD price continued its consolidation after the latest Chinese GDP and retail sales data. The GBP to AUD exchange rate is trading at 1.7553 as traders watched the ongoing political situation in the UK and the recent strength of the Australian economy. The current price is a few points below this week’s high of 1.7825.
China economy avoids a recession
The GBPAUD price consolidated this week as investors reacted to several important events. First, the UK published strong GDP numbers. The economy expanded in May this year, helped by doctor visits. At the same time, manufacturing and industrial production were significantly better than what analysts were expecting.
The GBP/AUD also reacted to the stellar Australian jobs data. The numbers revealed that the unemployment rate dropped to 3.9% in June as the economy added thousands of jobs. Analysts now believe that the wage price index will keep rising as the labor market tightens. The Reserve Bank of Australia decided to hike rates by 0.50% earlier this month.
The GBP to AUD exchange rate also reacted to the Chinese economic numbers. The country’s economy expanded by 0.4% in Q2 even after many cities went on lockdown. This increase was worse than the median estimate of 1.0%. Meanwhile, retail sales rose by 3.1% while fixed asset investments rose by 6.1%.
Meanwhile, in the UK, Penny Mordaunt and Rishi Sunak have emerged as the favorites to become the next Prime Minister. They will seek to replace Boris Johnson who resigned following a series of scandals.
GBP/AUD forecast
The daily chart shows that the GBP/AUD pair has been in a consolidation phase recently. It has moved slightly below the 25-day and 50-day moving averages. Also, the pair has formed a symmetrical triangle that is shown in blue. This triangle has more room to go before it hits the convergence point.
Therefore, the pair will likely continue consolidating and then have a bearish breakout in the coming weeks. This breakout will push it to the next key support at 1.7000. A move above the upper side of the triangle will invalidate the bearish view.
