GBP/AUD continues to advance on Monday but still couldn’t break the resistance level of a bearish term that was formed in mid-October.
Let’s take a look at the factors that have been driving the pound US dollar exchange rate across the week.
The pair is trading at 1.8681, up 0.31% as of 5:29 AM UTC. Currently, the price is trading very close to the channel’s resistance and might try to break it in the next few hours to reverse the bearish mood. For this, investors will closely monitor data on the UK GDP, business investment, and trade balance, which will be released later today.
The Aussie has been under pressure since Friday amid disappointments around the US-China trade relationship. On Friday, US President Donald Trump said that he was not ready to fully roll back tariffs on Chinese goods, though he expects to ink a trade deal on the US territory, potentially in Iowa.
Trump denied reports from Beijing, which rumored that the US President had agreed to begin rolling back tariffs. He said that he was happy with the tariffs as of today. The president stated:
“They’d like to have a rollback but I’ve not agreed to anything. […] China would like to get somewhat of a rollback, not a complete rollback because they know I won’t do it.”
“We’re getting along very well with China. They want to make a deal… frankly they want to make a deal a lot more than I do. I’m very happy right now, we’re taking in billions of dollars,” Trump added.
GBP/AUD started to depart from the channel’s support level after the Reserve Bank of Australia (RBA) released an updated economic outlook on Friday. The central bank said it was ready for even lower rates as it downgraded a series of forecasts related to the GDP growth, wages, consumption, and housing investment.