GBP/AUD Plunged 1,900 pips since Brexit, Bearishness Likely to Continue

United Kingdom – Net Lending to Individuals

On Wednesday, at GMT 9:30 a.m., the Bank of England will release the month-over-month net lending to individuals figure, which measures the changes in the total value of new credit issued to consumers in the past month.

Since consumer spending is highly correlated with consumer credit, the net lending to individuals figure can indicate future consumer spending as well as consumer confidence in the economy. This is because people only take on debt when they feel financially secure about future incomes.

Last month, the last net lending to individuals figure came out at $1.6 billion and the forecast for today is set at $2.9 billion.

Australia – Private Sector Credit

On Thursday, at GMT 2:30 a.m., the Reserve Bank of Australia will release the month-over-month Private Sector Credit data, which measures the changes in the total value of new credit issued to consumers and corporations in the country over the previous month.

Binary options traders consider the private sector credit to be an important fundamental indicator of the Australian economy as borrowing and spending are highly correlated. Consumers and businesses only take out credit when they feel confident about their ability to pay it back in the future. Hence, it also acts as a measure of consumer and business confidence.

Last month, the private sector credit in Australia increased by 0.5% and the forecast for this month is currently set 0.5% as well.

Trade Recommendation for the GBP/AUD


Since the Brexit result, the GBP/AUD plunged around 1,900 pips, and the pair is currently trading around 1.7800. During last week’s downtrend, the pair has closed below the important psychological support level around 1.8500, and the Big Round Number (BRN) 1.8000.

Although the UK’s private sector lending figure is expected to go up, the downturn is very strong right now and it would likely invalidate any fundamental analysis for the GBP/AUD in the short run. Hence, if the GBP/AUD price closes below 1.8000, it would likely attract additional bearish pressure and continue to move downwards.

Under the circumstances, it would be recommended that binary options traders consider placing a PUT order for the GBP/AUD with their binary options brokers as soon as the price and closes below the 1.8000 level.

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