GBPAUD, Weekly
This pair are looking to continue their downward movement as the AUD recovers (following good jobs data today) and the pressure continues on the GBP due to persistent Brexit fears and dovish tones from the BOE. As the AUD strengthens and the GBP weakens in the short term we are looking for SHORT trades on any retracement from current levels.
The “real possibility” of Brexit, as the IMF termed it in this week’s release of its semi-annual world outlook, adds to the pressure on sterling. This is also why it failed to sustain gains in the wake of Tuesday’s UK inflation data, which showed March headline CPI rising more than expected to a cycle high of 0.5% y/y. The IMF also revised UK growth down to 1.9% for this year, down from 2.2%, and this assumes the UK remaining in the EU. As for Brexit risk, the latest FT poll tracker shows a narrow 1 percentage point lead for the Remain camp, with 43% compared to the 42% support for the Leave camp, narrowing over the last couple of weeks from respective levels of 45% and 40%.
I’m therefore looking for sell signals inside my 1.8526 – 1.8610 sell area (50% and 38.2% Fibonacci retracement levels) with Target 1 (T1) at 1.8010- 1.8000 (Weekly low, 200 DMA and round psychological number) and Target 2 (T2) at 1.7845 (Next support level).
Only trade based on my analysis and trade ideas if you agree with the analysis and if you are (after substantial testing) confident that you can assume the risk. Should you need further training on trading and risk management please attend any of our free webinars.
Janne Muta
Chief Market Analyst
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About Janne Muta, HotForex’s Chief Market Analyst
Janne Muta is a seasoned industry professional with over 16 years experience in the global markets. Originally from Finland, Janne has worked for institutions in both Helsinki and London as an institutional fund manager, global market analyst and FX educator.
Traders and fund managers from around the world have benefited greatly from Janne’s technical analysis methods. The indicators and price action based trading models he has developed, have, after rigorous testing, proven to be invaluable in identifying high probability trades.
“My mission is to help you to become a confident and successful trader”
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