GBP/AUD Bearish Retracement Likely Amid Sound Australian Fundamentals
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GBP/AUD – Technical Analysis for Australian Binary Options
Australia – CB Leading Index
Today, 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.
For the last two months, the CB leading index increased by 0.4% and if the positive trend continues this month, it would like have a bullish influence on the Australian Dollar against other major currencies.
United Kingdom – GDP Second Estimate
On Thursday, at GMT 9:30 a.m., the UK’s Office for National Statistics will release the quarter-over-quarter second estimate of the GDP, which measures the changes in the inflation adjusted value of all products and service made in the country over the past quarter.
Since GDP measures the overall productivity in the economy, the second estimate acts as a leading indicator of the actual GDP growth level. Hence, binary options investors consider the UK’s second estimate GDP (q/q) to be an important indicator of the health of the economy.
Last quarter, the second estimate GDP was at 0.3% growth and the forecast for this quarter is also set at an additional 0.3% growth.
GBP/AUD Forecast
Since forming a large bullish bar on March 16, 2017, the GBP/AUD remained in a strong uptrend and climbed by around 1,500 pips over the last two months. During this time, the GBP/AUD also formed two well respected uptrend lines. However, on May 12, 2017, the GBP/AUD price broke below the intermediate uptrend line and later found support around 1.7325 level.
As the UK’s second estimate GDP is expected to increase by 0.3%, but the Australian CB leading index is expected to increase by 0.4%, we believe it would likely set a bearish fundamental outlook for the GBP/AUD this week. Under the circumstances, if the GBP/AUD penetrates below the support around 1.7325 level, it would likely attract additional bearish momentum in the market.
Hence, Australian binary options traders should look out for trading opportunities below this major support level around 1.7325.
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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
Asif Imtiaz
