- Summary:
- The GBPAUD price is about to break out lower after Australia's inflation data and weak retail figures from the United Kingdom.
The GBP to AUD (GBPAUD) pair is down by 0.26% as traders react to the relatively strong Australian inflation data and weak shop price index data in the UK. It is trading at 1.8253, which is substantially than this month’s high of 1.8523. The Aussie is also stronger than the euro and the US dollar today.
In a report released earlier today, the Australian Bureau of Statistics (ABS) said that the country’s consumer inflation rose in the third quarter. The headline CPI rose by 1.6% from the second quarter and by 0.7% year-on-year. That was better than the previous decline of 1.9% and 0.3% in the second quarter.
According to the bureau, the rising prices was mostly because of a sharp increase in childcare after a government’s sponsored program ended in July. Home furnishings prices also rose in September.
Notably, the GBPUSD is rising because the Australian economy seems to be in a better shape than in the UK. For one, the country has managed to contain the virus having reported less than 20 new cases yesterday. This is in contrast to the UK, which is reporting thousands of new cases every day. At the same time, China, Australia’s biggest trading partner is the only economy in expansion zone. Higher commodity prices will also support the Australian economy,
At the same time, the GBP to AUD is rising because of the weak economic data from the UK. Earlier today, data from the British Retail Consortium showed that the shop price index declined by 1.2% in October. There are also risk about Brexit as time runs out.
GBPAUD technical outlook
On the four-hour chart, we see that the GBP to AUD price has been in a downward trend because of the reasons we have mentioned above. It has dropped from a high of 1.8523 o the current level of 1.8253. It has also formed a bearish flag pattern that is shown in orange. It has also moved below the 25-day and 15-day exponential moving averages and along the 23.6% Fibonacci retracement.
Therefore, I suspect that the price will continue falling as bears aim for the 38.2% retracement level at 1.8138. However, a move above 1.8400 will invalidate this trend.
GBP to AUD technical chart
