Earlier today, Governor and other committee members decided to keep the RBA interest rates unchanged at 1.5%. This was widely expected and came at strong net export-expanding by 0.3% in Q2 2017 beating expectation for a 0.7% contraction over the same period. Well, such news always brings some optimism with it and despite the Aussie selling off after the news and it rebounded in the European session. Governor Lowe on his hand said that this was advised from the strong labor condition which is expected to push consumer demand up as inflation chart it way up. The USD on the other hand continue to lose and with labor stagnating, most view this recent NFP data as fair because even though job creation ticked lower, nonfarm productivity actually expanded. This minor slip in the number of jobs could be overshadowed by increasing productivity and unchanged hourly earnings and could make the Fed hike rates in December. Inflation could be a hindrance but we will wait to see what voting members of FOMC have to say going forward.
At the moment though, I’m net bull on the GBP. Technically, the general trend is bullish in this currency pair with buy signal printed in the 4HR chart after a 3 bar candle reversal formation. Even if there is lower lows in the monthly chart, momentum is still skewed to the upside. It is for this reason that I see prudent to buy or even set a market limit in anticipation for an upside.
I will trade as follows:
Buy Stop: 142.00
Stop Loss: 141.00
Take Profit: 145-Resistance zone