GBP AUD

Amid global volatility, key levels on these Aussie crosses continued to be respected. We look at potential setups as we enter the new trading week.

There’s a lot of excitement in Chinese markets about the latest stimulus measures to address flagging economic growth. Given it’s often used as a proxy for those traders looking to play China without directly investing in China, this type of environment should benefit cyclical currencies such as the Australian dollar.

GBP/AUD is rarely as overbought as it is right now. And when it has been this overbought in the recent past, it’s usually coincided with a near-term top.

Considering the rally in cyclical assets following the soft US inflation report, the steep reversal in AUD/USD comes across as a little strange. As long as economic growth holds up, the prospect of Fed rate cuts should provide tailwinds for cyclicals. Therefore, the reversal has created a short setup. But not against the US dollar.

Attempts to ram EUR/AUD and GBP/AUD into higher trading ranges failed last week, suggesting the Aussie dollar may be starting to rediscover its mojo against some major European crosses.

S&P global release their flash PMI reports for the major regions today. And with PMI reports from Europe and US, it places EUR/USD onto trader's radars.

The GBP/AUD uptrend faces a string of big tests over the next 24 hours, potentially influencing the outlook for interest rates from the BoE and RBA.

WTI crude oil has pulled back into the support zone highlighted in yesterday's report for a potential move to $90. We also look at GBP/AUD, as it may have printed a multi-month top and the daily chart also appears on the cusp of a breakdown.

Whichever metrics of inflation we look at, it is hard to argue there isn’t more inflation set to come our way whilst commodities continue to rally.

It’s been a decent week for the dollar, but there is the potential for mean reversion as we head towards the weekend with 100 resistance looming.

UK inflation is expected to rise to 6% y/y today, and if we’re to see a strong inflation data set overall it could revive hopes of a less cautious BOE regarding future hikes.

With the exception of China, Asian equity markets tracked Wall Street higher overnight after Jerome Powell effectively removed concerns of an aggressive rate hike path.

A turbulent day across global equities made for a painful day in Asia, although Wall Street posted a sharp reversal heading into the close.

Volatility was surprisingly well contained overnight, given the rising levels of it leading into the US close. Do we simply move on, or is it the calm before the storm?

The Turkish Lira hit fresh new lows overnight as President Erdogan fired his Finance Minister (for opposing rate cuts, along with everyone else).

At 50.1, the headline PMI read is not exactly setting the world alight, but it was above expectations and shows the sector expended.

US markets are closed just after lunch today. But that is not to say it will be a dull session if price action overnight is anything to go by.