Easy 3R - Union Jack vs. his superior cousin
Updated
A fairly easy and straightforwarded trade:
Just short the GBPAUD on rallies as the RBA will (very likely) still hike rates in 2024, where as the UK is done with rate hikes and will cut much faster than the market expects right now.
UK:
- CPI will fall faster than the BOE expects it right now.
- Especially services inflation will has a big downside surprise risk
-> BOE sees it at 6.9%, where as I see it more at 6.7 or 6.8%
- UK Labour market will also weaken faster than the BOE expecs it, putting pressure away from wage inflation
-> BOE sees no rate cuts in 2024, where as I see Q2 2024 as the perfect time for the BOE to start cutting rates
Just short the GBPAUD on rallies as the RBA will (very likely) still hike rates in 2024, where as the UK is done with rate hikes and will cut much faster than the market expects right now.
UK:
- CPI will fall faster than the BOE expects it right now.
- Especially services inflation will has a big downside surprise risk
-> BOE sees it at 6.9%, where as I see it more at 6.7 or 6.8%
- UK Labour market will also weaken faster than the BOE expecs it, putting pressure away from wage inflation
-> BOE sees no rate cuts in 2024, where as I see Q2 2024 as the perfect time for the BOE to start cutting rates
Note
AUD perspective:This week we get important data out of Australia, lets see!
Wage inflation as well as employment data.
But the most important will be the CPI at the end of november.
Note
As forecasted services inflation comes weaker than consensus and the BOE expected it-> GBP was an easy sell :)
Wage Price Index out of Australia comes at 1.3%
-> Multi Year High
Note
➡️I get more and more the feeling that we won't see the 1.97 in GBPAUD this year anymore, so I'm playing with the idea to short it at another level.Lets see!
Note
🏛🇦🇺The RBA decision today was very dovish, so maybe I will indeed get my 1.97 entry.🏛🇬🇧The BOE decision next week will decide about that, lets see!
Note
No chance, I won't get my retracement anymore, the trade is already near the targt.Note
🇦🇺🇬🇧The trade is now at target. In hindsight I should have be more aggressive and shorted it right away.➡️I will wait for a bigger retracement now and see if I can short it from higher levels.
Note
🇦🇺🇬🇧A retracemnt is happening and GBPAUD made a run of 400 Pips already from the lows.➡️I still see some more upside potential before I would short it.
-> The region from 1.94 would be interesting for building the first short positions.
Note
🇦🇺🇬🇧It rallied further 100 Pips today so a possible short entry at 1.94 becomes more realistic🟢 ➡️I will still keep my 1.97 entry and see how it goes next week where we will get A LOT of UK data (great!)
➡️🇬🇧📊UK Employment, UK CPI (!!!), UK Retail Sales -> all in ONE week, it's gonna be the week of the pound!🇬🇧
Note
📊🇦🇺Employment data out of Australia disappointed to a great extent.➡️-64k overall and -100k full-time Jobs is as bad as it can get.
➡️A big blow for all hopes of a further rate hike from the RBA in february and the question is now if we see further hikes in 2024 at all or if this hiking cycle has ended.
📊🇦🇺The Aussie CPI data out on 31. January will be a big factor here, lets see!
-> GBPAUD rallied further and has now almost reached the 1.94 region. After the bad Aussie Data I will stick with my entry at 1.97 and will not look for earlier entries✅️
Note
🏛🇦🇺 The RBA bared its hawkish teeth today and firmly pushed back market expectations for a first rate cut in May.-> I agree: the RBA is in no hurry to rush ahead with hasty rate cuts
📊🇦🇺 Next week's labour market data from Australia will very likely confirm this view🟢
-> still no trade in GBPAUD for me so far.
Note
This week we have the📊🇬🇧UK CPI as well as the
📊🇦🇺Employment data out of Australia.
Both important data points for the GBPAUD.
The pair climbed strongly this year but still has not reached my entry point at 1.97.
-> I will stay patient and wait for my perfect entry🟢
Note
📊🇬🇧While the UK CPI was on the weaker side the jobs data from Australia beat every possible estimation and imagination📊🇦🇺-> GBPAUD will be a great short (longterm) and I'm looking for short entries in this pair🟢
Trade active
🇬🇧🇦🇺The trade finally triggered and now the ride can start!
My GBPAUD Short is already up 300 Pips so my guess is the target will be reached soon🟢
The next small target will be at 1.92800 before the real down move starts🟢
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