GBP/AUD Forecast 11/09: Bounces From Support (Video)

(MENAFN- Daily Forex) The British pound continues to fight back on Thursday, but at this point, there are a lot of different things moving the markets around. The question now is: can we stay in the consolidation range?

GBP/AUD

The British pound jumped quite nicely against the Australian dollar during trading on Thursday, bouncing from a potential support level as rates in the United Kingdom rallied.

All things being equal, this is a pair that has been very negative for a while because, quite frankly, the Reserve Bank of Australia is much more hawkish than many others. In fact, most people have the Bank of England as somewhat neutral. The slight bounce during the day, although impressive on a short-term backdrop, is still hardly enough to change the overall trajectory, at least not yet.

Top Regulated Brokers1 Get Started 74% of retail CFD accounts lose money The interest rate differential with Australia's cash rate at 4.35%

Following 3 hikes this year, in contrast to England's 3.75%, the carry trade still favors the downside. The one thing that is starting to see a bit of traction here is that maybe Australia is a little bit more exposed to the global risk scenario than Great Britain, and with that, it makes sense that we bounce here.

Now, that being said, I do think that the market could perhaps be looking to settle into a longer-term range, or maybe better put, stay in a long-term range between 1.94 and 1.87.

EURUSD Chart by TradingView

If that's the case, we may have further to go, but I'm still looking for signs of exhaustion, especially if we see the 1.90 level not be able to be broken. The 50-day EMA sits just below there, so I'll watch the next day or so. Some type of long wick to the upside could have me shorting this pair.

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