Forex traders will start the new trading week with UK data in focus. The data covers the month of November, and economists predict that industrial and manufacturing production posted an annualized contraction. The construction and services sector is also expected to post a contraction in November. GDP data will front-and-center, but how will it impact the GBPAUD which faced with selling pressure? Today’s fundamental analysis will take a look at price action in both directions.
Australian data showed a small increase in monthly inflationary pressures, but the RBA remains open to cut interest rates in response to the bush fires. One estimate suggests the economy has lost over $20 billion so far, with a risk to tourism season likely to add to that figure. Will bears drive price action in the GBPAUD into a breakdown, or will bulls step in? 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 Industrial Production and UK Manufacturing Production: UK Industrial Production for November is predicted flat at 0.0% monthly and to decrease by 1.3% annualized. Forex traders can compare this to UK Industrial Production for October, which increased by 0.1% monthly, and which decreased by 1.3% annualized. UK Manufacturing Production for November is predicted to decrease by 0.2% monthly and 1.6% annualized. Forex traders can compare this to UK Manufacturing Production for October, which increased by 0.2% monthly, and which decreased by 1.2% annualized.
- UK Construction Output Seasonally Adjusted: UK Construction Output Seasonally Adjusted for November is predicted to increase by 0.6% monthly, and to decrease by 1.4% annualized. Forex traders can compare this to UK Construction Output Seasonally Adjusted for October, which decreased by 2.3% monthly and 2.1% annualized.
- UK Trade Balance: The UK Visible Trade Balance for November is predicted at -£11.800B. Forex traders can compare this to the UK Visible Trade Balance for October, which was reported at -£14.486B. The UK Trade Balance Non-EU for November is predicted at -£3.500B. Forex traders can compare this to the UK Trade Balance Non-EU for October, which was reported at -£5.729B. The UK Total Trade Balance for November is predicted at -£2.539B. Forex traders can compare this to the UK Total Trade Balance for October, which was reported at -£5.188B.
- UK GDP: The UK GDP for November is predicted flat at 0.0% monthly and to decrease by 0.1% for the three-month-over-three-month period ending in November. Forex traders can compare this to the UK GDP for October, which was reported flat at 0.0% monthly, and flat at 0.0% for the three-month-over-three-month period ending in October.
- UK Index of Services: The UK Index of Services for November is predicted flat at 0.0% monthly, and to increase by 0.2% for the three-month-over-three-month period ending in November. Forex traders can compare this to the UK Index of Services for October, which increased by 0.2% monthly and 0.2% for the three-month-over-three-month period ending in October.
Here is the key factor to keep in mind today for Australian Dollar trades:
- Australian TD Securities Inflation: Australian TD Securities Inflation for December increased by 0.3% monthly and by 1.4% annualized. Forex traders can compare this to Australian TD Securities Inflation for November, which was reported flat at 0.0% monthly and which increased by 1.5% annualized.
Should price action for the GBPAUD remain inside the or breakout above the 1.8770 to 1.8870 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.8800
- Take Profit Zone: 1.9385 – 1.9520
- Stop Loss Level: 1.8700
Should price action for the GBPAUD breakdown below 1.8770 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1.8700
- Take Profit Zone: 1.8495 – 1.8545
- Stop Loss Level: 1.8770
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