GBPAUD Forex Forecast – Ready to Retrace

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GBPAUD Forex Forecast - Ready to RetraceGBPAUD has been trending lower on its 4-hour chart, moving below a descending trend line connecting the latest highs of price action. Price is starting to pull up from its recent dive and applying the Fib tool on the swing high and low reveals that the 61.8% retracement level coincides with the trend line.
The moving averages are also close to this falling resistance level, adding to its strength when it comes to keeping gains in check. The 100 SMA is below the longer-term 200 SMA so the path of least resistance is to the downside.
Also, stochastic is starting to head south from the overbought area to indicate that selling pressure is building up. A bit of bearish divergence can be seen since stochastic made higher highs while price made lower highs. Sellers could take GBPAUD back to the swing lows around 1.6750.
Jobs data from the UK came in mixed, as the number of claimants fell by 8.6K instead of rising by 5.2K while the average earnings index fell short of the estimated rise to 2.5% and landed at 2.4% only. Prior to this, the CPI readings were mostly stronger than expected, with the headline figure up from 0.5% to 0.6%.
UK retail sales is still up for release today and strong consumer spending data could be reported since hiring was upbeat. Analysts are expecting to see a 0.1% rebound in retail sales after sliding by 0.9% in the previous month.
Before that, Australia is still set to print its employment change report and might show a 10.2K gain in hiring, stronger than the earlier 7.9K rise and enough to keep the jobless rate steady at 5.8%. Weaker than expected data could bring GBPAUD to the trend line while upbeat results could allow the 38.2% Fib to hold as resistance already.
To contact the reporter of the story: Samuel Rae at samuel@forexminute.com