GBP/AUD Aims Higher Amid Forecast of a Slowdown in Australian Construction Sector

United Kingdom – Public Sector Net Borrowing

On Tuesday, at GMT 9:30 a.m., the UK’s Office for National Statistics will release the public sector borrowing figure that measures the difference in value of the spending and income of the public corporations as well as the central government of the UK and other local governments during the last month.

A positive public sector borrowing figure would indicate a budget deficit and a negative figure would indicate a budget surplus. Hence, a negative figure is usually taken binary options investors as a good news for the British Pound.

Last month, the UK public sector borrowing figure came out at 5.3 billion, and the forecast for this month is set at a much higher figure, at 6.6 billion.

 Australia – Construction Work Done

On Wednesday, at GMT 12:30 a.m., the Australian Bureau of Statistics will release the quarter-over-quarter Construction Work Done index, which measures the changes in the total inflation adjusted value of construction works and projects completed in the country.

Since construction industry has a sizeable influence on the overall employment and consumer spending in the economy, binary options traders consider the Construction Work Done index to be a leading indicator of the Australian economic strength.

Last quarter, the Australian Construction Work Done reading increased by 9.3%, but the forecast for this quarter is set at a -2.1% decrease.

GBP/AUD Forecast

Since breaking above the downtrend line on September 14, 2017, the GBP/AUD remained very bullish and the pair has climbed up by around 770 pips over the last two months. However, after reaching the 1.7570 level, which is also the high from May 18, 2017, the GBP/AUD found a strong resistance last week. Currently, it is trading just below this major resistance.

Although the UK’s Public Sector Net Borrowing is expected to increase to 6.6 billion, the Australian Construction Work Done index is expected to decline and it carries more weight than the public sector borrowing. Hence, we believe it would set a bullish fundamental outlook for the GBP/AUD this week. Therefore, if the GBP/AUD closes above the resistance near 1.7570, it would likely attract additional bullish momentum in the market.

Hence, Australian binary options traders should look out for trading opportunities above this major resistance level around 1.7570.

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