The Aussie took a one-two punch as risk aversion and talks of fewer imports from China hit the comdoll.
Will today’s catalysts be enough to push GBP/AUD outside a triangle chart pattern?
Before I show you the chart, take a look at the top headlines that rocked Asian session traders:
Upcoming Potential Catalysts on the Economic Calendar:
- U.K.’s labor market numbers at 6:00 am GMT
- Eurozone ZEW economic sentiment at 9:00 am GMT
- Germany’s ZEW economic sentiment at 9:00 am GMT
- U.S. NFIB small business index at 10:00 am GMT
- U.S. CPI report at 12:30 pm GMT
What to Watch: GBP/AUD
In case you missed the headlines above, the Aussie turned lower against most of its counterparts today on reports that Chinese state-owned utilities and steel mills have received verbal notice from customs to immediately stop importing Australian coal. Yipes!
Meanwhile, Johnson & Johnson has had to stop its COVID-19 vaccine trials after a participant had an unexplained illness. Double yipes!
GBP/AUD was immune to the anti-Aussie move, however, probably because the U.K. is facing a messy Brexit AND additional lockdowns unless policymakers step up their game.
Will pound bears roar louder than the Aussie bears today? GBP/AUD turned lower from the 1.8200 area and is headed for areas of interest close to 1.8100 or 1.8050.
If the U.K.’s jobs report print weaker numbers than last month’s release, then we could see GBP/AUD revisit its Fib retracement levels (or even the trend line support) before finding some bullish pressure.
If the J&J vaccine headlines continue to spook risk-takers, though, or if the U.K.’s labor numbers are better than markets had expected, then GBP/AUD could break above the triangle pattern on the 1-hour time frame.
Keep in mind that GBP/AUD tends to move by around 130 pips on Tuesdays, so there’s still room for some volatility for the pair for the rest of the day. Make sure you place your stops accordingly so you don’t miss out on some legit moves!
