In case you missed it, annual increases in UK consumer prices slowed from 8.7% to a 15-month low of 7.9% in June. The core rate, which excludes volatile items such as energy and food, also fell from 7.1% to 6.9%.
Both inflation rates remain above the Bank of England’s 2.0% target, but progress is welcome for those worried about the UK’s cost of living crisis.
Decreased pressure on the Bank of England to extend rate hikes has affected sterling across the board.
GBP/AUD for 15 minutes Planned by TV
The GBP/AUD, in particular, fell from the 1.9180 area and reached 1.9060 levels before some buyers got involved.
Have we seen the latest GBP weakness today?
Australia will print labor market data for June in the upcoming Asian session. The talk is that the country saw fewer additional jobs, which will reinforce the RBA’s decision to pause its rate increases.
If traders are happier about the UK making progress on the cost of living crisis, or if Australian jobs data sends the Aussie lower, the GBP/AUD could regain ground.
The pair could bounce from the trend line support not far from S2 (1.9040) for today’s pivot points.
Of course, we are still not sure how traders in the US session will react to the UK news, or whether it matters after the US also publishes lower-level data such as the housing starts later today.
Therefore, I will be looking to enter long positions between S1 (1.9090) and the S2 Pivot Point level while targeting prior areas of interest such as 1.9180 or 1.9230.
I am considering placing my stops just below the 1.9000 psychological handle and considering adding additional longs if there is enough bullish momentum after the trend line bounce.
what do you think? Will the GBP/AUD extend its short-term bullish trend?
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