Trading opportunities on currency pair: last week the pound reached the first target. Expect a growth to the 2.0220-2.0488 zone. The weaker the macroeconomic data on Australia, the stronger the rebound will get.
I did a trading idea on the GBP/AUD on 18th May. In that idea I was expecting a growth in the pound against the Australian dollar. There were three price levels which were acting as targets: 2.0026, 2.0220 and 2.0468. Over two weeks, the GBP/AUD rate increased from 1.9562 (closing price on 15th May) to 2.0054 (+492 points). The pound’s first target was reached.
The Australian dollar was thrown into a spiral of sales due to the strengthening of the US dollar and a fall in investment in Australian business in the first quarter. The RBA put its GDP forecasts for 2015 and 2016 down. In connection with this, the market expects the RBA to put its rates down again.
Nobody is expecting the Bank of England to do the same and therefore the pound is in a much stronger situation than the Australian dollar. That week, a renewed fall of the pound against many different currencies took place due to British Q1 GDP values being left unchanged against market expectations of them being put up.
This week I chose pairs with the Aussie dollar since a lot of volatility is expected on them over the course of the week. A lot of important data is set to come out of Australia. The GBP/AUD rate has reached its first target. Now the path northward lies at 2.0220. The daily indicators are overloaded, so the bulls’ success will depend on the fundamental data.
The most important of which includes:
On Monday at 4:00 EET, China is publishing its index for activity outside of the manufacturing sector and its PMI for May. At 4:30 EET, Australia is releasing its building permit figures for April. At 12:30 EET, the UK is publishing its May PMI.
On Tuesday at 7:30 EET the RBA is due to let us know its interest rate decision, amongst other things. At 12:30 EET, the UK is publishing its May index for business activity in the construction sector.
On Wednesday at 4:30 ETT, Australia is publishing its Q1 GDP data. At 4:45 EET, HSBC’s Chinese business activity index in the service sector for May will be out.
On Thursday at 4:30 EET, the Australians are due to publish their balance of trade figures along with retail sales for April. At 14:00 EET, the Bank of England will make clear its interest rate decision along with an accompanying announcement.
On Friday at 12:30 EET, the UK will release its CPI expectations for Q2.
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