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.
AUDGBP has fallen to a 0.4765 support after turning lower around 0.4900. In addition to being at support the pair is trading outside the descending regression channel which suggests that the move by the latest down candle has taken the market too far down too fast. In addition the RSI is firmly in the oversold territory. This turns the focus to the area between 0.4791 and 0.4825 and we should be looking for short entry signals should the pair rally there. My targets for a successful short entry are at 0.4721 (T1), 0.4670 (T2).