GBP/AUD Breaks Above Downtrend Line Amid Forecast of Increasing House Prices in the UK
Last Updated on May 1, 2021
GBPAUD Forecast – 27th April 2021
Australia – Consumer Price Index
On Wednesday, at GMT 1:30 a.m., the Australian Bureau of Statistics will release the quarter-over-quarter consumer price index (CPI) figure. It measures the changes in the price of goods and services bought by Australian consumers in the last quarter.
the Australian central bank to measures inflation with the consumer price index. Any significant change in the CPI often makes the UK Forex market extremely volatile. Also, inflation at the retail level has a big influence on the central bank’s future monetary policy. Hence, CFD traders consider it to be a leading indicator of the Australian economy.
Last quarter, the Australian consumer price index increased by 0.9%. The forecast for this quarter is that it will likely increase by 0.9% as well.
United Kingdom – Nationwide House Price Index (HPI)
This week, the UK’s Nationwide Building Society will release its house price index. It measures the changes in the selling price of houses that are bought using mortgages issued by Nationwide.
Rising house prices encourage home buyers to purchase new homes with the expectation that their investment value will increase over time. An increasing HPI is considered good for the overall economy. Hence, Forex traders consider the Nationwide house price index to be a leading indicator of the UK’s economy.
Last month, the Nationwide house price index decreased by -0.2%. Analysts are expecting it to increase by 0.5% this month.
The GBP/AUD remained bearish since the beginning of the week. However, it found support just above the 1.7750 level. Earlier today, it broke above the hourly downtrend line. It also tested the resistance near 1.7900. Currently, it is trading just below this key resistance.
The Australian CPI will likely increase by 0.9%, same as last quarter. On the other hand, analysts are expecting the UK’s Nationwide HPI to increase by 0.5%, compared to a -0.2% decline during the last period. We believe it would set a bullish fundamental outlook for the GBP/AUD this week. Therefore, if the GBP/AUD closes above the resistance near 1.7900, it would likely attract additional bullish momentum in the market.
Hence, CFD traders should look out for trading opportunities above this major resistance level around 1.7900.
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