Source: PaxForex Premium Analytics Portal, Fundamental Insight
Australian Building Approvals for June decreased 0.7% monthly, and Private House Approvals increased 1.2% monthly. Forex traders can compare this to Australian Building Approvals for May, which surged 11.2% monthly, and Private House Approvals, which dropped 2.1% monthly.
Australian Home Loans for June decreased 3.3% monthly, and Investment Lending for Homes plunged 6.3% monthly. Forex traders can compare this to Australian Home Loans for May, which increased 2.1% monthly, and Investment Lending for Homes, which rose 0.9% monthly.
The Reserve Bank of Australia increased interest rates by 50 basis points to 1.85%. Economists predicted a rise of 50 basis points from 1.35%. Forex traders can compare this to the previous Reserve Bank of Australia interest rate decision, where it hiked rates by 50 basis points.
UK Nationwide House Prices for July are predicted to increase 0.3% monthly and 11.5% annualized. Forex traders can compare this to UK Nationwide House Prices for June, which rose 0.3% monthly and 10.7% annualized.
Financial markets began the new trading month on a downbeat track, likely to extend today. Economic data continues to paint a mixed picture after the US economy contracted for two consecutive quarters, meeting the definition of a technical recession. Despite all warning signs, US policymakers and politicians claim the US is not in a recession, pointing to the labor market, which continues to deteriorate. The US ISM Manufacturing Index showed contractions in the sub-components for employment and new orders, while construction spending slumped. US Fed Chair Powell noted that he takes the first GDP reading for each quarter with a grain of salt, hoping for upward revisions. Data suggests the economy fared worse, making a downward revision likely, similar to GDP data for the first quarter.
The forecast for the GBP/AUD remains bullish, but this currency pair faces an increase in volatility as price action tests its narrow Ichimoku Kinko Hyo Cloud, from where a breakout is likely to extend the rally. Adding to bullish pressures is the rising Tenkan-sen, but the Kijun-sen remains flat, suggesting choppy trading ahead until bulls can push through. The CCI continues to advance after recording a higher low in extreme oversold territory, followed by a breakout and rally above zero. It is likely to move above 100, but traders should wait for a pullback before entering their buy orders. Can bulls keep the rally alive and pressure the GBP/AUD to more upside? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Should price action for the GBP/AUD remain inside the or breakout above the 1.7470 to 1.7565 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.7520
- Take Profit Zone: : 1.7745 – 1.7820
- Stop Loss Level:1.7430
Should price action for the GBP/AUD breakdown below 1.7470, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1.7430
- Take Profit Zone: 1.7275 – 1.7330
- Stop Loss Level: 1.7470
Open your PaxForex Trading Account now and add this currency pair to your forex portfolio.
