GBP/AUD Bearishness Likely to Prevail amid Lower Forecast for UK’s Manufacturing PMI

GBP/AUD – Technical Analysis for Binary Options Brokers

Australia – Cash Rate

Tomorrow at GMT 3:30 a.m., the Reserve Bank of Australia (RBA) will release the official cash rate, which is the interest rate that major Australian banks and financial institutions pay to borrow funds held at the RBA.

Since short-term interest rates are the primary factor in the valuation of the Australian Dollar against other major currencies, binary options investors pay close attention to any changes in the official cash rate.

The RBA last time cut its cash rate was on August 2016, when it was reduced to 1.5% from 1.75%. The forecast for this month was that the RBA will leave the cash rate unchanged for the time being at 1.5%.

United Kingdom – Manufacturing PMI

Later, at GMT 9:30 a.m., the Markit will release the United Kingdom’s manufacturing purchasing managers’ index (PMI) figure, which measures the level of a diffusion index by surveying around 600 purchasing managers in the country.

Since businesses are the first to react to changing economic climate and the PMI is calculated based on survey questions covering employment, production, price levels, new order situations as well as inventory conditions; binary options traders consider this data to be a leading indicator of the overall economic health of the country.

Last month, the UK’s manufacturing PMI came out at 55.4 and the forecast for this month is currently set at 54.6.

Trade Recommendation for the GBP/AUD

GBP/AUD - Technical Analysis for Binary Options brokers and Forex

Since breaking below the uptrend line on September 16, 2016, the GBP/AUD price has fallen by around 1,560 pips over the last month. However, after reaching near the 1.5850 level, the GBP/AUD found strong support and so far, it has failed to close below this level on the daily time frame.

As the Australian cash rate is expected to remain unchanged at 1.5%, but the UK’s manufacturing PMI is expected to go down to 54.6, the fundamental outlook for the GBP/AUD would likely to remain bearish this week. Since the GBP/AUD has remained very bearish over the last few weeks, any close below the previous low would likely attract additional bearish momentum in the market, which can cause the price to sharply go further south.

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 closes below the 1.5850 level on the daily time frame.

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