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Play of the Day: Is GBP/AUD Ready for a New Trend?

October 18, 2023| Forex Market

GBP/AUD is not getting traction despite higher-than-expected CPI data from the U.K.!

We know from earlier today that the U.K.’s consumer inflation remained high, with annual headline CPI remaining at 6.7% (vs. 6.6% expected) while the core figure only dipped from 6.2% to 6.1% when analysts saw it slipping all the way to 6.0%.

A sticky high inflation supported hawkish calls for the Bank of England (BOE) and the British pound traded higher against its major counteparts.

GBP/AUD 1-hour Forex

GBP/AUD 1-hour Forex Chart by TradingView

But despite GBP’s strength, GBP/AUD was still unable to trade above a trend line support that it recently broke.

In fact, the pair is staying closer to the 1.9100 psychological level that lines up with the S1 Pivot Point line in the 1-hour time frame.

We don’t have far to look for clues. Better-than-expected Chinese growth markers printed during the Asian session made it a bit easier to buy “risky” assets like AUD and NZD.

Meanwhile, higher gold and crude oil prices have also increased the demand for commodity-related currencies like AUD, NZD, and CAD.

For now, we’re keeping close tabs on GBP/AUD possibly extending its intraweek downswing.

GBP/AUD traders who anticipate more selling can short around the 1.9100 levels or at a potential broken trend line retest. The 1.9050 and 1.9000 areas of interest make for good initial targets but you can also aim lower if there’s enough bearish momentum.

Make sure to make allowances for high price swings! Australia is set to print its September jobs data in the next Asian trading session and, based on the Event Guide, we may see volatile price action that could take out your stop losses during the release.

This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.

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