GBP is attracting buyers

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AUDGBP, 240 min

The pound has found its feet after underperforming over the last several sessions. UK think tank NIESR helped as it issued, yesterday afternoon in London, an upward revision to its UK GDP estimate for the three months to November, now expecting 0.6% growth versus 0.5% previously. That would mark a tick higher from the official 0.5% growth clip seen in Q3. NIESR is also anticipating the BoE to hike the repo rate by 25 bp in February, which is well ahead of most forecasters and with (as the FT highlights) sterling markets factoring just 11% odds for such a move as soon as February.

Today GBPAUD had risen to a 2.0959  resistance after turning higher around 2.0400. In addition to being near resistance the pair has just moved back inside a rising regression channel suggesting that the move by the latest up candle had taken the market too far up too fast. In addition the RSI has been in the overbought territory. The 4h trend looks solid with a stair stepping move higher. This turns the focus to the area between 2.0730 and 2.0864. We should be looking for long entry signals at or inside the range. My targets for a successful long entry are at 2.1082 (T1), 2.1213 (T2).

 

Janne Muta

Chief Market Analyst

HotForex

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