May 16, 2023

GBPAUD could see some movement into Wednesday with Westpac consumer confidence data and UK employment coming over the next 24 hours.

GBPAUD – Weekly Chart

GBPAUD – Weekly Chart

The price of GBPAUD has support at the 1.82 level after the recent uptrend stalled at 1.90. 

The Australian economy will start the economic data with Westpac consumer sentiment. However, the economy has been struggling with higher inflation, and the index has found it hard to break the June 2022 high of 86.4. Last month saw a jump from 78.5 to 85.8, and this month may get above the 86 number. A surprise interest rate hike by the Reserve Bank of Australia further dented consumer confidence. 

Tuesday’s European session will see employment data from the United Kingdom. Traders expect 160k jobs added to the economy, down from 169k last month. The unemployment rate is likely to remain at 3.8%. 

The UK economy posted growth of 0.1% between January and March, according to the Office for National Statistics (ONS). 

ONS director of economic statistics Darren Morgan said: “Despite the UK economy contracting in March, GDP grew a little over the first quarter as a whole. Widespread decreases across the services sector drove the fall in March. 

“Despite the launch of new number plates, car sales were low by historical standards – continuing the trend seen since the start of the pandemic – with warehousing, distribution, and retail also having a poor month.” 

But there was positive news: UK bank loans are expected to rise by 1.2% this year, up £29 billion, said the EY ITEM Club. Falling inflation, lower-than-expected energy bills, and a strong jobs market mean GDP in the country is expected to grow 0.2% in 2023 rather than heading for a recession. That is expected to drive an increase in consumer and business borrowing. Net mortgage lending is expected to grow 1.2% in 2023, up from 0.4% in the February Forecast. 

Anna Anthony, the UK financial services managing partner at EY, said the UK is “still on the path to economic recovery”, but we are “in a more optimistic place than we were a few months ago”.

Traders can follow the GBPAUD reaction to the coming data with an 800 pip gap between the 1.82 support and the 1.90 resistance level.

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