Source: PaxForex Premium Analytics Portal, Fundamental Insight
The Preliminary Australian Manufacturing PMI for December came in at 50.4, the Preliminary Australian Services PMI at 46.9, and the Preliminary Australian Composite PMI at 47.3. Forex traders can compare this to the Australian Manufacturing PMI for November, reported at 51.3, the Australian Services PMI at 47.6, and the Australian Composite PMI at 48.0.
UK GfK Consumer Confidence for December came in at -42. Economists predicted a figure of -43. Forex traders can compare this to UK GfK Consumer Confidence for November, reported at -44.
UK Retail Sales for November decreased by 0.4% monthly and 5.9% annualized. Economists predicted an increase of 0.3% and a drop of 5.6%. Forex traders can compare this to UK Retail Sales for October, which rose by 0.9% monthly and plunged by 5.9% annualized. UK Core Retail Sales for November contracted by 0.3% monthly and 5.9% annualized. Economists predicted a rise of 0.3% and a contraction of 5.8%. Forex traders can compare this to UK Core Retail Sales for October, which expanded by 0.7% monthly and collapsed by 6.4% annualized.
The UK S&P Global/CIPS Manufacturing PMI for December is predicted at 46.3, the UK S&P Global/CIPS Services PMI at 48.5, and the UK S&P Global/CIPS Composite PMI at 48.0. Forex traders can compare this to the UK S&P Global/CIPS Manufacturing PMI for November, reported at 46.5, the UK S&P Global/CIPS Services PMI at 48.8, and the UK S&P Global/CIPS Composite PMI at 48.2.
The Bank of England increased interest rates by 50 basis points from 3.00% to 3.50% yesterday, meeting market expectations, but two members voted for no increase. Market participants across the global economy fear that central banks will cause a recession, but opinions about the severity differ.
The forecast for the GBP/AUD turned bearish in the short term after the horizontal resistance area prevented more upside. The flat Kijun-sen and Tenkan-sen confirm the lack of short-term upside momentum. Traders should monitor the Ichimoku Kinko Hyo Cloud, which moves higher, but began to narrow, making it vulnerable to a bearish crossover, which could add to downside pressure. After the CCI completed a breakdown from extreme overbought territory, in-line with the pause in the upside trend, more downside could follow, dragging price action lower. Can bears overpower bulls in the short term and force the GBP/AUD into its horizontal support area? 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 breakdown below the 1.8120 to 1.8260 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1.8175
- Take Profit Zone: : 1.7590 – 1.7700
- Stop Loss Level:1.8295
Should price action for the GBP/AUD breakout above 1.8260, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.8295
- Take Profit Zone: 1.8370 – 1.8470
- Stop Loss Level: 1.8260
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