GBPAUD has been undoubtedly one of the strongest currency pairs over the past month, as the market come to the realization that their respective central banks are on opposite ends of the spectrum – RBA may need to provide more accommodation, while the BoE could begin to relax their easy monetary policy stance in 2014. As a result, it fundamentally argued for a higher GBPAUD and the technical outlook also backed this theme up.
Since our last update GBPAUD has achieved all three of our noted long-term levels to watch: 1.8000 (psychological & barrier/option related), 1.8140 (July 2010 High) & 1.8280 (2010 High). However, the technical landscape suggests it may be wise to express a bit of caution over the coming sessions since a daily RSI bearish divergence has been spotted. Interestingly, bullish & bearish divergences between GBPAUD and daily RSI has marked several key turning points over the past 6 months – Hence, the recently witnessed RSI bearish divergence with price is a potentially ominous sign.
Key data & events which may influence GBPAUD next week:
- RBA Assistant Governor Debelle speaks
- RBA December meeting minutes
- UK Nov. CPI
- UK Nov. PPI
- BoE Governor Carney speaks
- RBA Governor Stevens Testifies at House
- Australia Westpac Nov. Leading Index
- BoE December meeting minutes
- UK Oct/Nov. Employment report
- UK Nov. Retail Sales
- UK Dec. Consumer Confidence
- UK 3Q GDP (final)
Accordingly, with several important events originating from both Australia and the United Kingdom over the coming days, and the potential two-way risk that they hold, it may be prudent to curtail our bullish GBPAUD bias for now.
Chart Source: Forex Charts by eSignal
Recommended Content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.