The GBP/AUD extended downside movement on Friday despite the release of Britain’s Gross Domestic Product (GDP) figure which came out in line with the average forecast of 3.0%, spurring a sense of relief among the pound buyers.
The corrective bearish wave began following the Bank of England (BoE) decision to retain the existing interest rate. Today the pound tried to recover its losses in the Asian session but again overwhelmed by the bearish pressure produced following the UK Growth figure. As of this writing, the price is being traded around 1.8266 down from the opening price of 1.8293.
The pair is expected to face a hurdle around 1.8305, the 100 MA. The next resistance lies around the 1.8386-90 zone, as indicated by the trend line.
On the downside, support can be seen near 1.8200, the psychological number and then 1.8110, the low of October 15 as demonstrated in the following chart.
Gross Domestic Product (YoY) (Q3)
The GDP of UK remained 3.0% in the third quarter as released by the National Statistics department of Britain. The outcome was just in line with the expectations of analysts but below than 3.2%–the reading of the same quarter in 2013. Generally speaking, a worse than expected GDP reading is considered bearish for the GBPAUD and vice versa.
Considering the overall technical and fundamental outlook there may be two good trading strategies for the pair. First, sell on a four-hour close below the lower trend line as described above. Secondly, wait for the correction and buy the pair on a breakout through the upper trend line as demonstrated in the four-hour chart