GBPAUD Higher Despite Sterling Threats on Many Fronts

Summary:

GBPAUD was higher on Tuesday despite the U.K. currency facing a multitude of risks. Traders are likely pricing in a potential Brexit deal.

GBPAUD was higher on Tuesday despite the U.K. currency facing a multitude of risks. Traders are likely pricing in the good news for the Aussie after a recent rally and are now positioning for a potential Brexit trade deal.

The Pound has managed to shake off yesterday’s drama, which saw the market reacting to strict lockdowns in the U.K. over Christmas due to a new virus strain and 40 countries blocking flights to the country over fears that they may import further cases. P.M. Johnson is now looking to secure an 11th-hour trade deal as negotiators seek to give Europe some concessions over fishing quotas.

Last week saw strength in the AUD to GBP after both countries released employment numbers. The U.K. reported a loss of 144k jobs after analysts forecast -250k, but the numbers are still worse than any quarter during the last financial crisis. Australian employment saw a surprise gain of 90k compared to projections for 50k. This will keep the Australian Reserve Bank happy that the country’s recovery is on track.

GBPAUD Technical Outlook

GBPAUD saw a bottom last week at 1.7500 and the pair is now pushing to test the 1.7800 level. Further gains here could move to test the 1.80-8100. Support would be another test of the 1.7500 level, where another bounce would likely be a medium-term low. The Investing Cube team is currently available to help all levels of traders with the Forex Trading Course or one-to-one coaching.