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12 Mar 2014
GBP/AUD finds supply 1.8560
FXStreet (Guatemala) - Regardless of the lower tone for Sterling today, GBP/AUD took off. AUD/USD was been hit, lifting the cross, on the back of further negativity around China as the Australian economy plays host to its biggest trading partner.
Today, we heard from the BoE in the Inflation Report Hearing. BOE's Carney said that any BOE rate increases will be gradual and limited but went onto say that spare capacity is at the higher end of BOE range adding that any QE exit should only start after several rate increases. BOE's Weale then commented and contradicted that the level of spare capacity in UK may be overstated. Sterling has weakened somewhat since the officials commented on the inflationary outlook for the UK economy as markets listened to their insights as to when and how far rates can start to climb.
GBP/AUD Head and Shoulders
Meanshile, Tim Riddell at ANZ Research suggested slippage from the corrective push to 1.8825 lacks dynamism, but still looks set to test channel support (currently 1.8155), though retracements to 1.7915 may not develop. “The head and shoulders pattern risk is still apparent, but a more aggressive slide to test 1.8180 is needed to suggest that a flip of price action above 1.8100 may develop. If rising support (1.8180-00) holds, the pattern will become that of a shallow correction. A rally above 1.8800 is still needed to suggest an early return to the uptrend (for a move towards 1.9750)”.
Today, we heard from the BoE in the Inflation Report Hearing. BOE's Carney said that any BOE rate increases will be gradual and limited but went onto say that spare capacity is at the higher end of BOE range adding that any QE exit should only start after several rate increases. BOE's Weale then commented and contradicted that the level of spare capacity in UK may be overstated. Sterling has weakened somewhat since the officials commented on the inflationary outlook for the UK economy as markets listened to their insights as to when and how far rates can start to climb.
GBP/AUD Head and Shoulders
Meanshile, Tim Riddell at ANZ Research suggested slippage from the corrective push to 1.8825 lacks dynamism, but still looks set to test channel support (currently 1.8155), though retracements to 1.7915 may not develop. “The head and shoulders pattern risk is still apparent, but a more aggressive slide to test 1.8180 is needed to suggest that a flip of price action above 1.8100 may develop. If rising support (1.8180-00) holds, the pattern will become that of a shallow correction. A rally above 1.8800 is still needed to suggest an early return to the uptrend (for a move towards 1.9750)”.