With the UK election just two days away, forex traders will receive a heavy dose of economic data out of the UK. GDP data, industrial and manufacturing data, and the index of services data are eagerly awaited. The GBPAUD has extended its rally, but how will price action react to this morning’s economic releases? Today’s fundamental analysis will take a look at price action in both directions.
Australian consumer confidence rose for the week ending December 8th as holiday shopping season kicked into full gear. NAB Business Conditions remained unchanged in November, but confidence decreased. House prices rose in Australia, but forex traders showed concern about the rise in the Chinese CPI. The GBPAUD remained near the top of its horizontal resistance area, what impact will today’s UK data have? Subscribe to the PaxForex Daily Fundamental Analysis, and earn over 5,000 pips per month.
Here are the key factors to keep in mind today for British Pound trades:
- UK GDP: The UK GDP for October is predicted to increase by 0.1% monthly and flat at 0.0% for the three-month-over-three-month period ending in October. Forex traders can compare this to the UK GDP for September which decreased by 0.1% monthly and which increased by 0.3% for the three-month-over-three-month period ending in September.
- UK Construction Output Seasonally Adjusted: UK Construction Output Seasonally Adjusted for October is predicted to decrease by 0.3% monthly and by 0.1% annualized. Forex traders can compare this to UK Construction Output Seasonally Adjusted for September which decreased by 0.2% monthly and which increased by 0.5% annualized.
- UK Industrial Production and UK Manufacturing Production: UK Industrial Production for October is predicted to increase by 0.2% monthly and to decrease by 1.2% annualized. Forex traders can compare this to UK Industrial Production for September which decreased by 0.3% monthly and by 1.4% annualized. UK Manufacturing Production for October is predicted flat at 0.0% monthly and to decrease 1.4% annualized. Forex traders can compare this to UK Manufacturing Production for September which decreased by 0.4% monthly and by 1.8% annualized.
- UK Trade Balance: The UK Visible Trade Balance for October is predicted at -£11.700B. Forex traders can compare this to the UK Visible Trade Balance for September which was reported at -£12.541B. The UK Trade Balance Non-EU for October is predicted at -£3.500B. Forex traders can compare this to the UK Trade Balance Non-EU for September which was reported at -£4.032B. The UK Total Trade Balance for October is predicted at -£2.700B. Forex traders can compare this to the UK Total Trade Balance for September which was reported at -£3.360B.
- UK Index of Services: The UK Index of Services for October is predicted to increase by 0.1% monthly and by 0.2% for the three-month-over-three-month period ending in October. Forex traders can compare this to the UK Index of Services for September which was reported flat at 0.0% monthly and which increased by 0.4% for the three-month-over-three-month period ending in September.
Here are the key factors to keep in mind today for Australian Dollar trades:
- Australian ANZ Roy Morgan Weekly Consumer Confidence Index: The Australian ANZ Roy Morgan Weekly Consumer Confidence Index for the week of December 8th was reported at 109.0. Forex traders can compare this to the Australian ANZ Roy Morgan Weekly Consumer Confidence Index for the week of December 1st which was reported at 108.1.
- Australian NAB Business Conditions and Australian NAB Business Confidence: Australian NAB Business Conditions for November were reported at 4 and Australian NAB Business Confidence at 0. Forex traders can compare this to NAB Business Conditions for October which were reported at 4 and to Australian NAB Business Confidence which was reported at 2.
- Australian House Price Index: The Australian House Price Index for the third-quarter increased by 2.4% quarterly and decreased by 3.7% annualized. Economists predicted an increase of 1.5% quarterly and a decrease of 4.6% annualized. Forex traders can compare this to the Australian House Price Index for the second-quarter which decreased by 0.7% quarterly and by 7.4% annualized.
- Chinese PPI and Chinese CPI: The Chinese PPI for November decreased by 1.4% annualized and the Chinese CPI increased by 4.5% annualized. Economists predicted a decrease of 1.5% and an increase of 4.3%. Forex traders can compare this to the Chinese PPI for October which decreased by 1.6% annualized and to the Chinese CPI which increased by 3.8% annualized.
Should price action for the GBPAUD remain inside the or breakdown below the 1.9155 to 1.9300 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1.9270
- Take Profit Zone: 1.8545 – 1.8640
- Stop Loss Level: 1.9400
Should price action for the GBPAUD breakout above 1.9300 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.9400
- Take Profit Zone: 1.9730 – 2.0000
- Stop Loss Level: 1.9300
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