GBP/AUD Likely to Resume Downtrend as UK’s Loans to Individuals Set to Decline

Australia – Private Sector Credit

On Friday, at GMT 1:30 a.m., the Reserve Bank of Australia will release the month-over-month Private Sector Credit data. It 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. Because 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 0.4%. The forecast for this month is currently set at an increase of 0.4% as well.

United Kingdom – Net Lending to Individuals

On Friday, at GMT 8:30 a.m., the Bank of England will release the month-over-month net lending to individuals figure. It measures the changes in the total value of new credit issued to consumers in the past month.

Consumer spending is highly correlated with consumer credit.  Binary options investors consider 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 5.7 billion. The forecast for today is set at 5.3 billion.

GBP/AUD Forecast


The GBP/AUD remained bearish since the last week of April. Over the last two months, it has climbed down by around 1075 pips. However, the GBP/AUD formed a bullish reversal pattern in the first week of June and started a retracement. Consequently, it has broken above the downtrend line, but failed to break above the resistance around the 1.7990 level.

The Australian Private Sector Credit will likely grow by 0.4%, same as last month this week. On the other hand, analysts are expecting the United Kingdom’s Net Lending to Individuals figure to come out at 5.3 billion, 0.4 billon less than last month. We believe it would set a bearish fundamental outlook for the GBP/AUD this week. Therefore, if the GBP/AUD closes below the support near 1.7720, it would likely attract additional bearish momentum in the market. However, conservative traders may want to wait for the GBP/AUD break below the uptrend line before considering to enter the market.

Hence, Australian binary options traders should look out for trading opportunities below this major support level around 1.7720.

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