GBP AUD

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.

With plenty of major data and central bank speeches scheduled in the UK and Australia this week, the next few days may prove to be critical for the medium-term trajectory for GBP/AUD heading into 2024.

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.

GBP/USD has looked healthier on the charts, closing below a key support zone on Thursday. Downside risks for GBP/AUD are also growing.

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.

Maybe, although it depends on the pair. But we suspect GBP/AUD could be in for some mean reversion, given the technical levels it stalled at overnight.

We look on track for a strong close this week for equity markets, further cementing our view that their corrective lows were printed earlier this month.