GBP/AUD Appears Bullish Amid Better Than Expected Manufacturing PMI in The UK

United Kingdom – Manufacturing PMI

Yesterday, at GMT 9:30 a.m., the Markit released the United Kingdom’s manufacturing purchasing managers’ index (PMI) figure, which measures the level of a diffusion index by surveying around 600 purchasing managers in the country.

Since businesses are the first to react to changing economic climate and the PMI is calculated based on survey questions covering employment, production, price levels, new order situations as well as inventory conditions; binary options traders consider this data to be a leading indicator of the overall economic health of the country.

Last month, in January, the UK’s manufacturing PMI came out at 52.1 and the forecast for February was set at 51.8. However, the actual figure came out much better, 52.9.

Australia – Cash Rate

Later in the week, on Tuesday, at 3:30 a.m., the Reserve Bank of Australia (RBA) released the official cash rate, which is the interest rate that major Australian banks and financial institutions pay to borrow funds held at the RBA.

Since short-term interest rates are the primary factor in the valuation of the Australian Dollar against other major currencies, binary options investors pay close attention to any changes in the official cash rate.

The RBA last time cut its cash rate was on May 2015, when it was reduced to 2% from 2.20%. The forecast for this month is that the RBA will leave the cash rate unchanged for the time being.

Trade Recommendation for the GBP/AUD

GBPAUDDaily

The GBP/AUD has remained in a strong downtrend since November 2015, and formed a well-respected downtrend line in the process. Earlier last month, the GBP/AUD tested the downtrend line, but soon resumed the downturn, falling around 970 pips since January 10, 2016.

Last week, the GBP/AUD price closed below the support level around 2.0165, but yesterday the pair started a sharp retracement and closed above the support level.

As the UK’s Manufacturing PMI figure came out slightly better than the forecast, the fundamental outlook for the GBP/AUD would likely remain bullish this week. Furthermore, the sharp retracement that pushed the price above 2.0165 also confirms a bullish momentum from a technical point of view.

Under the circumstances, it would be recommended that traders consider placing a CALL order for the GBP/AUD with their binary options brokers at once the price closes above 2.0335.

Recommended Broker: HighLow.net

Asif worked as a prop trader for almost a decade, and later he managed trading operations for one of the largest foreign exchange strategy developers in Europe. Currently, he works as a trading consultant to several brokers and writes on various tech and financial topics. You can reach him at contact@asifimtiaz.com

LinkedIn Google+ 

Asif Imtiaz

Asif worked as a prop trader for almost a decade, and later he managed trading operations for one of the largest foreign exchange strategy developers in Europe. Currently, he works as a trading consultant to several brokers and writes on various tech and financial topics. You can reach him at contact@asifimtiaz.com

Leave a Reply