GBPAUD was higher by 0.20% on the day despite the Bank of England committing to a £150bn QE extension and warning of a gloomy outlook for the economy. The Aussie has been gaining heavily on the week after the RBA slashed interest rates and committed to its own stimulus measures.
The Reserve Bank of Australia cut the nation’s interest rate to a record low of 0.1% from the previous 0.25% level. This was accompanied by the announcement that the bank would commit to a bond-buying program of A$140bn, which will be targeted at government bonds of 5-10yrs maturity.
The Bank of England has acted just as England begins a new four-week lockdown over the coronavirus. The bank said a fourth quarter slowdown was possible but they did not expect another recession. The bank also saw further pressure on the jobs numbers with an estimated peak of 7.75% in Q2 of 2021, which is higher than the previous 4.5% forecast. The Australian economy and its currency should get a boost as the virus has disappeared in the country for now.
Brexit is still hanging in the balance in the background but EU Chief negotiatior Michel Barnier has still warned of divergences in the ideas of both parties. Time is running out for a deal to be agreed that can be legally ratified and implemented before potential tariffs after year-end.
GBPAUD Technical Outlook
The GBPAUD has tumbled after a failure at 1.8400 which marked a double top. The pair has tested the moving average at 1.8050 but may look to move lower into the resistance ahead of 1.7900. The September low at 1.7500 would the ultimate target if the bearishness persists. The Investing Cube team is currently available to help all levels of traders with the Forex Trading Course or one-to-one coaching.
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GBPAUD Daily Chart
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