British Data News Failure to Push the Pound off a Cliff
Fundamentals & Sentiment
GBP:
Yes, today's UK CPI release printed slightly above consensus. Does it change the inflation downtrend? Doesn't seem so. The readings couldn't even beat the previous ones. Moreover, the GBP swayed upward for instance until the market realized that disinflation persists - many GBP pairs seem eagerly absorbing any GBP demand. Overall, looks like a news failure, a decent trigger to go short.
AUD:
First, the bird's eye view: the Australian economy is doing better than the UK, considering GDP QoQ, Services PMI, and Average Cash Earnings. Market internals of a few GBP pairs show divergencies against the pound, while Risk Reversals hint at bearish bias, particularly in GBPAUD. Finally, CFTC reports show AUD is quite stretched to the downside.
Technical & Other
Setup: S(TRF)
Setup timeframe: D
Trigger: 1h
Medium-term: Sideways
Long-term: Sideways
Min target: support
Risk: 0.14%
Entry: Market
GBP:
Yes, today's UK CPI release printed slightly above consensus. Does it change the inflation downtrend? Doesn't seem so. The readings couldn't even beat the previous ones. Moreover, the GBP swayed upward for instance until the market realized that disinflation persists - many GBP pairs seem eagerly absorbing any GBP demand. Overall, looks like a news failure, a decent trigger to go short.
AUD:
First, the bird's eye view: the Australian economy is doing better than the UK, considering GDP QoQ, Services PMI, and Average Cash Earnings. Market internals of a few GBP pairs show divergencies against the pound, while Risk Reversals hint at bearish bias, particularly in GBPAUD. Finally, CFTC reports show AUD is quite stretched to the downside.
Technical & Other
Setup: S(TRF)
Setup timeframe: D
Trigger: 1h
Medium-term: Sideways
Long-term: Sideways
Min target: support
Risk: 0.14%
Entry: Market
Trade active:
Closed half and tightened stop as we're going into data release from Australia.
Trade closed manually:
Weak data from Australia; price rejection around DMA and local trendline; end of the week