GBP/AUD Retracement May Attract Bulls as UK’s Inflation Situation Improves

Australia – CB Leading Index

Yesterday, at GMT 3:30 p.m., the Conference Board Inc will release the month-over-month leading index for Australia, which measures the changes in the level of a composite index based seven other major fundamental indicators.

Since the CB leading index aggregates some of the other indicator data, binary options traders consider this to be an important representation of the overall Australian economy. However, since most of these data are previously released, the CB leading index tends to have a minimized immediate market impact.

Last month, the CB leading index increased by 0.5% and this month it came out positive, but the rate came down to only 0.1%.

United Kingdom – Consumer Price Index

Today, at GMT 9:30 a.m., the UK’s Office for National Statistics released the year over year Consumer Price Index (CPI) that measures the changes in the price of goods and services acquired by consumers.

Since the CPI basically measures the inflation level in the economy, this data is considered binary options investors as one of the most important leading indicators of the overall economic health

Last month, the UK’s CPI (y/y) increased by 0.3%, and this month the forecast was set at 0.4%. However, the actual figure came out slightly better than what the market was expecting, at 0.5%.

Trade Recommendation for the GBP/AUD

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Since the infamous Brexit, the GBP/AUD price has declined around 2,700 pips and fell to as low as 1.7050 on July 11.

However, on July 11, the GBP/AUD formed a minor bulling pin bar that broke above the short-term downtrend line, which triggered a retracement. Over the last week, the GBP/AUD price has gone up by 600 pips and found resistance near 1.7640.

As the Australia’s CB Leading Index growth rate fell from 0.5% to 0.1% over the last month, it suggests there could be a bullish momentum building in the market. However, the UK’s CPI figure also improved to 0.5% and it would likely set a bullish fundamental outlook for the GBP/AUD this week.

From a technical perspective, if the GBP/AUD price breaks and closes above the 1.7640 level, it would likely attract additional bullish momentum and may go further up.

Under the circumstances, it would be recommended that binary options traders consider placing a CALL order for the GBP/AUD with their binary options brokers as soon as the price and closes above the 1.7640 level on the daily chart.

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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

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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

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