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12 Mar 2014
Flash: GBP/AUD uptrend to resume multi week - Westpac
FXStreet (Bali) - Westpac sees the GBP/AUD up trend resuming multi week.
Key Quotes
"GBP/AUD has been range-bound in recent weeks, given broad USD softness and more mixed price action on GBP after an extended rally. Multi-week we see the GBP/AUD up trend resuming, drifting back towards 1.89."
"Ongoing lacklustre momentum in China and thus commodities should weigh on AUD despite decent domestic data, while the BoE’s confidence in the UK economic outlook should maintain investor optimism in GBP. However short term upside should be limited by existing spec positioning long GBP and short AUD."
"The January 2014 high of 1.9187 was NOT accompanied by new highs in momentum. This momentum failure was a serious warning shot for the bulls. Last week’s Bearish Engulfing week (bearish candle pattern) has put us on alert for a break of the uptrend channel at 1.8120/40."
"A break of this level, in conjunction with current negative momentum trajectory justifies a material correction. Q3 2013 highs at 1.7480/90 would be a likely target, amounting to approximately a 38.2% retracement of the 2013 rally."
Key Quotes
"GBP/AUD has been range-bound in recent weeks, given broad USD softness and more mixed price action on GBP after an extended rally. Multi-week we see the GBP/AUD up trend resuming, drifting back towards 1.89."
"Ongoing lacklustre momentum in China and thus commodities should weigh on AUD despite decent domestic data, while the BoE’s confidence in the UK economic outlook should maintain investor optimism in GBP. However short term upside should be limited by existing spec positioning long GBP and short AUD."
"The January 2014 high of 1.9187 was NOT accompanied by new highs in momentum. This momentum failure was a serious warning shot for the bulls. Last week’s Bearish Engulfing week (bearish candle pattern) has put us on alert for a break of the uptrend channel at 1.8120/40."
"A break of this level, in conjunction with current negative momentum trajectory justifies a material correction. Q3 2013 highs at 1.7480/90 would be a likely target, amounting to approximately a 38.2% retracement of the 2013 rally."