Trade Signals: GBPAUD Could Move 300 Pips from This Range
GBPAUD has moved lower in the last two sessions after sterling had rallied from the 1.8000 level. The pair is trading within a well-defined range and a breakout could see a move of 300 pips in either the Aussie or Sterling’s favour.
The U.K. jobs release earlier in the week showed a loss of -164k jobs, which was larger than the 148k expected, and also larger than the -153k drop in the previous release. The decision by the Bank of England last week to provide additional monetary stimulus, alongside the Chancellor’s decision to extend the furlough scheme has helped the pound to shrug off the negative data.
GDP numbers for the third quarter were released today for the United Kingdom and it showed the economy grew by a record 15.5%. This was actually lower than the 15.8% expansion that analysts had expected and it comes after the record loss of 19.8% in Q2. Traders will also be looking ahead to the fourth quarter after another set of lockdowns in the U.K. and this has seen buying interest in sterling wane. Brexit talks are still ongoing and there is hope that a deal can be reached in order to have it formally agreed at a 19th November meeting of the EU27 members. .
Yesterday’s Westpac Consumer Confidence data from the Austrlian economy was also upbeat with a 107.7 reading compared to analyst expectations of 105. The Reserve Bank of Australia slashed interest rates recently to match the U.K. at 0.1% so the lockdowns and the economic data are becoming more important for this pair.
GBPAUD Technical Outlook
GBPAUD attempted a rally above the 1.8200 level but the price has now faded in the last two days to eye the 50-day moving average at 1.8100. The pair now has a defined range for a breakout between 1.8000 and 1.8200. A daily close above either of these levels should set up a target of 300 pips. The Investing Cube team is currently available to help all levels of traders with the Forex Trading Course or one-to-one coaching.