Forex traders will get key employment data out of the UK this morning. Despite Brexit uncertainties, employers have added jobs and more importantly wages have risen. This will ultimately keep the Bank of England sidelined as wage inflation is on the rise and provide a floor for the British Pound moving forward. Will today’s data deliver? The GBPAUD has started to retrace part of its powerful advance which spanned almost 800 pips over a four week period. Will price action slide further to the downside and into support or will a breakout keep the rally alive? Subscribe to the PaxForex Daily Fundamental Analysis and take the profitable side of this trade.
Australian consumer confidence retreated slightly from multi-week highs while business confidence as well as business conditions for August retreated further. The Australian economy is heavily dependent on China which is maneuvering through the trade war the US started. As a result, the Chinese PPI slipped further into deflationary territory and forex traders are closely monitoring how the People’s Bank of China will react. The Australian Dollar remained well supported despite the weak confidence data which kept the GBPAUD hovering just below resistance levels. Will price action accelerate to the downside or is a breakout on the horizon? Today’s fundamental analysis will cover both directions in this currency pair.
Here are the key factors to keep in mind today for British Pound trades:
- UK Jobless Claims Change and Claimant Count Rate: The UK Jobless Claims Change for August is predicted at 29.3K and the Claimant Count Rate is predicted at 3.2%. Forex traders can compare this to the UK Jobless Claims Change for July which was reported at 28.0K and to the Claimant Count Rate which was reported at 3.2%.
- UK Employment Change, ILO Unemployment Rate and Average Weekly Earnings: The UK Employment Change for the tri-monthly period ending in July is predicted at 55K and the ILO Unemployment Rate is predicted at 3.9%. Forex traders can compare this to the UK Employment Change for June which was reported at 115K and to the ILO Unemployment Rate which was reported at 3.9%. Average Weekly Earnings for the tri-monthly period ending in July are predicted to increase by 3.7% annualized and Average Weekly Earnings Excluding Bonuses are predicted to increase by 3.7% annualized. Forex traders can compare this to Average Weekly Earnings for June which increased by 3.7% and Average Weekly Earnings Excluding Bonuses which increased by 3.9%.
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 September 8th was reported at 113.3. Forex traders can compare this to the Australian ANZ Roy Morgan Weekly Consumer Confidence Index for the week of September 1st which was reported at 114.4.
- Australian NAB Business Conditions and Australian NAB Business Confidence: Australian NAB Business Conditions for August were reported at 1 and Australian NAB Business Confidence at 1. Forex traders can compare this to NAB Business Conditions for July which were reported at 3 and to Australian NAB Business Confidence which was reported at 4.
- Chinese PPI and Chinese CPI: The Chinese PPI for August decreased by 0.8% annualized and the Chinese CPI increased by 2.8% annualized. Economists predicted a decrease of 0.9% and an increase of 2.7%. Forex traders can compare this to the Chinese PPI for July which decreased by 0.3% annualized and to the Chinese CPI which increased by 2.8% annualized.
Should price action for the GBPAUD remain inside the or breakdown below the 1.7920 to 1.8040 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1.8000
- Take Profit Zone: 1.7560 – 1.7700
- Stop Loss Level: 1.8075
Should price action for the GBPAUD breakout above 1.8040 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.8110
- Take Profit Zone: 1.8335 – 1.8420
- Stop Loss Level: 1.8040
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