GBP/AUD: it’s just not cricket!

<p>The AUD once again took centre stage in the FX space overnight as the Wall Street Journal ran an interview with RBA external board member, […]</p>

The AUD once again took centre stage in the FX space overnight as the Wall Street Journal ran an interview with RBA external board member, Heather Ridout, where she commented that the AUD had not fallen enough and that the 0.8000 level “would be a fair deal for everybody”. She also added that Australia remained a high-cost economy and that growth was a concern.

The euro finally broke out of the 1.35/1.36 range – triggered by a slight improvement in the PMI data across the EU with the January highs of 1.3700/20 seen as the initial resistance area; while a close above could signal a re-test of the 1.3880 peak.

Cable remains the focus: breaking above the year high of 1.6605, which now targets levels not seen since 2011 at 1.6745.

Comments from Davos overnight have all but confirmed that the 7% unemployment threshold the BoE set is to be revised with a new forward guidance.

The general tone from Governor Mark Carney and BoE Martin Weale is that they have acknowledged upside changes in the UK economic outlook since the guidance was initiated, with Carney telling the BBC, “the case for a rate rise would be examined in next month’s inflation report but that it was important to look at the whole labour market, not just one indicator”.

A quiet day ahead of us with little key data. The only release will be the Canadian inflation data.

The highlight today will no doubt be BoE Governor, Mark Carney, addressing the conference in Davos – scheduled to start just after midday.

 

 

EUR/USD

Supports 1.3655-1.3630-1.3600 | Resistance 1.3725-1.3780-1.3800


USD/JPY

Supports 102.80-102.30-101.75  | Resistance 103.60-103.90-104.40

 

 



GBP/USD

Supports 1.6605-1.6550-1.6500 | Resistance 1.6690-1.6710-1.6745

 

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.