GBPAUD has been trending inside a long-term ascending channel visible on its daily time frame and is testing support at the mid-channel area of interest. This lines up with the 50% Fibonacci retracement level which already seems to be holding as support.
The 100 SMA is still above the longer-term 200 SMA to signal that the path of least resistance is to the upside or that the rally is likely to resume. These moving averages are also around the 50% Fib level.
Stochastic is on the move up to show that buyers are in control, but the oscillator is nearing overbought conditions. Turning lower could draw sellers back in and lead to a drop to the channel support closer to the 61.8% Fib at 1.6400.
Economic data from Australia turned out stronger than expected this week as the jobs report showed a 34.7K gain versus the estimated 13.2K increase for December while the previous month’s figure enjoyed an upgrade.
Data from China came in mostly in line with expectations. Fixed asset investment was unchanged at 7.2% instead of falling to 7.1% while industrial production ticked slightly higher.
The focus could shift back to the pound today as the UK will release its retail sales report. A drop of 0.8% is eyed, erasing part of the 1.1% gain in the earlier period, but the pickup in holiday spending could still lead to an upside surprise.
By Kate Curtis from Trader’s Way