Australia reported a surprise rebound in consumer confidence for August as second-quarter wage inflation rose slightly above expectations. The Australian Dollar was unable to capitalize on the better-than-expected data as China reported weaker industrial production and retail sales data. With yesterday’s stronger-than-expected UK employment data, the GBPAUD remains well support at current levels, will a breakout follow or will US President Trump’s announcement of a delay in certain tariffs force a breakdown? Today’s fundamental analysis will cover the path to the upside and look at the downside risk.
Forex traders will focus on UK inflation data which will be released this morning in order to gauge inflationary pressures and how this may impact the Bank of England. As other central banks have pushed through interest rate cuts, the British central bank is unlikely to follow through which will support the British Pound. Can the GBPAUD rally after the release of inflation data after Chinese data disappointed? Subscribe to the PaxForex Daily Fundamental Analysis where you will grow your balance trade-by-trade.
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Key Fundamental Factors for the GBPAUD
Here are the key factors to keep in mind today for British Pound trades:
UK CPI: The UK CPI for July is predicted to decrease by 0.1% monthly and to increase by 1.9% annualized. Forex traders can compare this to the UK CPI for June which was reported flat at 0.0% monthly and which increased by 2.0% annualized. The Core CPI for July is predicted to increase by 1.8% annualized and the CPI Including Housing Costs is predicted to increase by 1.8% annualized. Forex traders can compare this to Core CPI for June which increased by 1.8% annualized and to the CPI Including Housing Costs which increased by 1.9% annualized.
UK PPI: The UK PPI Input for July is predicted to increase by 0.6% monthly and by 0.3% annualized. Forex traders can compare this to the UK PPI Input for June which decreased by 1.4% monthly and by 0.3% annualized. The UK PPI Output for July is predicted to increase by 0.1% monthly and by 1.7% annualized. Forex traders can compare this to the UK PPI Output for June which decreased by 0.1% monthly and which increased by 1.6% annualized. The UK PPI Core Output for July is predicted to increase by 0.1% monthly and by 1.7% annualized. Forex traders can compare this to the UK PPI Core Output for June which increased by 0.1% monthly and by 1.7% annualized.
UK RPI: The UK RPI for July is predicted flat at 0.0% monthly and to increase by 2.8% annualized. Forex traders can compare this to the UK RPI for June which increased by 0.1% monthly and by 2.9% annualized. The UK RPI Excluding Mortgage Interest Payments for July is predicted to increase by 2.7% annualized. Forex traders can compare this to the UK RPI Excluding Mortgage Interest Payments for June which increased by 2.8% annualized.
UK House Price Index: The UK House Price Index for June is predicted to increase by 1.0% annualized. Forex traders can compare this to the UK House Price Index for May which increased by 1.2% annualized.
Here are the key factors to keep in mind today for Australian Dollar trades:
Australian Westpac Consumer Confidence: Australian Westpac Consumer Confidence for August increased by 3.6% monthly to 100.0. Forex traders can compare this to Australian Westpac Consumer Confidence for July which decreased by 4.1% monthly to 96.5.
Australian Wage Price Index: The Australian Wage Price Index for the second-quarter increased by 0.6% quarterly and by 2.3% annualized. Economists predicted an increase of 0.5% quarterly and of 2.3% annualized. Forex traders can compare this to the Australian Wage Price Index for the first-quarter which increased by 0.5% quarterly and by 2.3% annualized.
Chinese Retail Sales: Chinese Retail Sales for July increased by 7.6% annualized. Economists predicted an increase of 8.6% annualized. Forex traders can compare this to Chinese Retail Sales for June which increased by 9.8% annualized.
Chinese Industrial Production: Chinese Industrial Production for July increased by 4.8% annualized. Economists predicted an increase of 6.0% annualized. Forex traders can compare this to Chinese Industrial Production for June which increased by 6.3% annualized.
Chinese Fixed Assets ex Rural: Chinese Fixed Assets ex Rural for July increased by 5.7% annualized. Economists predicted an increase of 5.8% annualized. Forex traders can compare this to Chinese Fixed Assets ex Rural for June which increased by 5.8% annualized.
Chinese Property Investment: Chinese Property Investment for July increased by 10.6% annualized. Forex traders can compare this to Chinese Property Investment for June which increased by 10.9% annualized.
Chinese Surveyed Jobless Rate: The Chinese Surveyed Jobless Rate for July was reported at 5.3%. Forex traders can compare this to the Chinese Surveyed Jobless Rate for June which was reported at 5.1%.
Should price action for the GBPAUD remain inside the or breakout above the 1.7630 to 1.7795 zone the following trade set-up is recommended:
Timeframe: D1
Recommendation: Long Position
Entry Level: Long Position @ 1.7750
Take Profit Zone: 1.8030 – 1.8100
Stop Loss Level: 1.7560
Should price action for the GBPAUD breakdown below 1.7630 the following trade set-up is recommended:
Timeframe: D1
Recommendation: Short Position
Entry Level: Short Position @ 1.7560
Take Profit Zone: 1.7390 – 1.7425
Stop Loss Level: 1.7630
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