This week, our forex strategists targeted on the BOC Financial Coverage Assertion for potential high-quality setups.
Out of the 4 state of affairs/value outlook discussions this week, one dialogue arguably noticed each fundie & technical arguments triggered to turn into a possible candidate for a commerce & danger administration overlay.
Watchlists are value outlook & technique discussions supported by each elementary & technical evaluation, an important step in direction of making a top quality discretionary commerce thought earlier than engaged on a danger & commerce administration plan.
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Try our evaluate of that dialogue to see what occurred!
GBP/AUD: Tuesday – June 10, 2025
GBP/AUD 1-Hour Foreign exchange Chart by TradingView
On Tuesday, our strategists had their sights set on the U.Okay. employment information and its potential influence on the British pound.
Based mostly on our Occasion Information, expectations have been for the claimant rely change to rise by +80K from the earlier +112K enhance, with the unemployment price anticipated to carry regular at 4.5% and common earnings anticipated to stay flat at 5.6%.
With these expectations in thoughts, right here’s what we have been pondering:
The “Sterling Surge” State of affairs:
If the roles information got here in stronger than anticipated, notably displaying resilient wage progress or a decrease unemployment price, we anticipated this might dampen expectations for aggressive BOE price cuts.
We targeted on GBP/CHF for potential lengthy methods in a risk-on surroundings, particularly given SNB Chairman Schlegel’s current feedback about slicing charges and curbing franc power. In a risk-off surroundings, GBP/NZD lengthy made sense given the RBNZ’s dovish positioning and New Zealand’s weaker financial backdrop.
The “Sterling Stoop” State of affairs:
If U.Okay. employment figures disenchanted, displaying rising claimant rely past expectations or cooling wage progress, we thought this might weigh on GBP as markets revived dovish expectations for the Financial institution of England.
We eyed GBP/AUD for potential brief methods if danger sentiment stayed constructive, notably given the pair’s place close to key resistance ranges and the RBA’s hawkish stance on inflation. If danger sentiment turned unfavourable, GBP/JPY shorts seemed promising given the yen’s safe-haven enchantment in periods of uncertainty.
What Truly Occurred
The U.Okay. jobs report got here in with combined alerts however usually aligned with our bearish GBP bias:
- Employment change confirmed the U.Okay. added 112,000 jobs within the three months via March 2025, representing the weakest achieve since December
- Common earnings slowed to five.5% from a revised 5.7%, lacking the 5.6% expectation
- Unemployment price edged as much as 4.5%, matching expectations however representing the best degree since August 2021
- Jobless claimant rely rose by solely 5,200, considerably higher than the 22,300 anticipated however nonetheless a rise from the earlier studying
Market Response
This consequence essentially triggered our GBP bearish situations, and with danger sentiment remaining combined forward of the essential U.S. CPI information later within the week, GBP/AUD grew to become our focus pair.
Wanting on the GBP/AUD chart, we noticed preliminary promoting strain after the roles launch across the 2.0880 space, with the pair falling via S1 at 2.0764 then testing S2 at 2.0708 as weaker-than-expected wage progress seemingly weighed on sterling as markets repriced BOE expectations, pulling ahead price minimize bets from November to September.
Nonetheless, the selloff turned a nook upon testing the two.0700 main psychological degree as sterling’s bearish momentum reversed course on total USD weak point. Low conviction buying and selling forward of Wednesday’s U.S. CPI launch additionally translated to uneven value motion and prevented sterling from sustaining its directional bias.
GBP/AUD quickly discovered itself again above S1 and finally the pattern line, as AUD weak point ensued whereas market watchers have been additionally unimpressed by U.S.-China commerce discuss updates. Not even weaker than anticipated U.Okay. GDP information launched later within the week was capable of spur vital declines for GBP/AUD, as escalating geopolitical tensions between Israel and Iran weighed closely on the higher-yielding Aussie.
The Verdict
So, how did all of it play out?
Our elementary evaluation appropriately anticipated potential GBP weak point on disappointing employment information, notably the wage progress miss and rising unemployment. The preliminary market response aligned with our bearish bias because the pair broke under key technical ranges.
Nonetheless, this dialogue was “unlikely” supportive of a internet constructive consequence for many buying and selling approaches. Whereas the basic set off materialized as anticipated, the broader market surroundings labored towards sustained bearish momentum in GBP/AUD. The mix of greenback weak point on weak inflation prints, combined with danger aversion from Center East tensions, created difficult situations for directional methods.
Solely very energetic intraday merchants with nimble danger administration would have seemingly captured a internet constructive consequence by taking income on the preliminary decline and avoiding the following consolidation. The shortage of sustained follow-through highlighted the significance of contemplating broader market themes and upcoming catalysts when buying and selling occasion reactions.
For merchants who entered brief positions after the weak jobs information, correct commerce administration would have been essential given the pair’s fast reversal and consolidation round one other main psychological assist.
The important thing lesson right here is that whereas our evaluation caught the appropriate elementary route, exterior components like pre-CPI positioning and total market sentiment performed vital roles in limiting the follow-through, emphasizing the significance of staying conscious of broader market themes even when buying and selling particular occasion reactions.
