GBPAUD: Aussie Pushing Higher on Consumer Boost and EU Summit
The GBPAUD is lower following stronger consumer data from the Australian economy. Aussie bulls have also taken control of the pair as No-Deal Brexit risk looms over the pound ahead of a two-day EU summit in Brussels.
Today’s Westpac Consumer Confidence release saw a reading of 105 compared to the 93.8 expected by economists. This is a boost for the Aussie economy, which like most developed nations is dependent on consumer spending and services.
The real gains in the Aussie are being driven by profit-taking and bearish bets ahead of the EU summit. The meeting in Brussels will be held over two days and will involve crunch talks with U.K. trade envoys in order to try and agree a Brexit deal in principle. Prime Minister Boris Johnson had previously set today’s date as the deadline for the U.K. to walk away without an agreement, which would trigger a No-Deal Brexit.
The U.K. is scheduled to leave the European Union on December 31st and trade negotiations have still been unable to find common ground on a few key issues. The next two days could be volatile in the pound and media outlets are suggesting a “deal in principle” could be agreed before a final legal text.
GBPAUD Technical Outlook
The GBPAUD rallied to resistance at 1.8200 after mid-September lows but the pair has now seen a double top pattern and is pushing lowe. A stop at 1.8100 and a target of 1.7500 would give a near 500 pip profit potential for 100 pips risk. If you want to learn more about risk-reward and technical analysis, the Investing Cube team is currently available to assist all levels of traders with the Forex Trading Course or through one-to-one coaching.