Forex traders will get UK retail sales for December prior tot he Bank of England interest rate decision. Economists expect no change at today’s meeting, but with Brexit moving ahead in roughly six weeks, the press conference will receive additional attention. The GBPAUD moved away from its post-election peak, how will the Bank of England impact price action in this currency pair? Subscribe to the PaxForex Daily Fundamental Analysis and grow your balance trade-by-trade.
The Australian economy added more jobs than expected in November, adding to a minor rally in the Australian Dollar. November’s report more than erased October’s contraction in the labor market. The RBA was also less active in the force market and the GBPAUD corrected from its intra-day high into its horizontal support area. What impact will today’s UK economic data and central bank decision have on price action? Today’s fundamental analysis will take a look at price action in both directions.
Here are the key factors to keep in mind today for British Pound trades:
- UK Retail Sales: UK Retail Sales for November are predicted to increase by 0.3% monthly and by 2.0% annualized. Forex traders can compare this to UK Retail Sales for October, which decreased by 0.3% monthly, and which increased by 2.7% annualized. UK Retail Sales Including Auto and Fuel for November are predicted to increase by 0.2% monthly and by 2.1% annualized. Forex traders can compare this to UK Retail Sales Including Auto and Fuel for October, which decreased by 0.1% monthly, and which increased by 3.1% annualized.
- UK CBI Reported Sales and CBI Total Distributed Reported Sales: UK CBI Reported Sales for December are predicted at -4 and CBI Total Distributed Reported Sales are predicted at -10. Forex traders can compare this to UK CBI Reported Sales for November, which were reported at -3 and to CBI Total Distributed Reported Sales, which were reported at -15.
- Bank of England Interest Rate Decision, Asset Purchase Target and Corporate Bond Target: The Bank of England is predicted to keep interest rates at 0.75%, the Asset Purchase Target £435B and the Corporate Bond Target at £10B. Forex traders can compare this to the previous Bank of England meeting where the UK central bank decided to keep interest rates at 0.75%, the Asset Purchase Target £435B and the Corporate Bond Target at £10B.
Here are the key factors to keep in mind today for Australian Dollar trades:
- Australian Employment Report: The Australian Employment Change for November was reported at 39.9K. Economists predicted a figure of 15.0K. Forex traders can compare this to the Australian Employment Change for October, which was reported at -24.8K. The Unemployment Rate for November was reported at 5.2%. Economists predicted a reading of 5.3%. Forex traders can compare this to the Unemployment Rate for October, which was reported at 5.3%. 4.2K Full-Time Positions and 35.7K Part-Time Positions were created in November. Forex traders can compare this to the loss of 10.5K Full-Time Positions and the loss of 14.3K Part-Time Positions, which were reported in October. The Labor Force Participation Rate for November was reported at 66.0%. Economists predicted a reading of 66.0%. Forex traders can compare this to the Labor Force Participation Rate for October, which was reported at 66.0%.
- RBA FX Transactions: RBA FX Transactions for November were reported at A$665M. Forex traders can compare this to RBA FX Transactions for October, which were reported at A$420M. RBA FX Government Transactions for November were reported at -A$756M and RBA FX Other Transactions were reported at -A$239M. Forex traders can compare this to RBA FX Government Transactions for October, which were reported at -A$483M and to RBA FX Other Transactions, which were reported at A$2,268M.
Should price action for the GBPAUD remain inside the or breakout above the 1.8900 to 1.9100 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.9000
- Take Profit Zone: 1.9520– 1.9730
- Stop Loss Level: 1.8770
Should price action for the GBPAUD breakdown below 1.8900 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1.8770
- Take Profit Zone: 1.8430 – 1.8545
- Stop Loss Level: 1.8900
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