Sell GBP/AUD? Target: 1.5810 - Westpac

Analysts at Westpac suggested to Sell GBP/AUD, stating, "Looking for a downside break of recent tightening range."

Key Quotes:

"Entry: Look to sell 100% at 1.6110, Stop: 1.6175, Target: 1.5810.

Rationale:

• Recent data from China underscore the One Belt/One Road investment driver for 2017
• Chinese residential investment cycle is also turning up now (based into 2016)
• Consequently, bulk commodities are rising again on this investment demand and Chinese supply restrictions, so support AUD
• Realities of Brexit negotiations approach as UK's Parliament has passed the Article 50 Bill
• Opportunistic moves by SNP, to call for another referendum, increase uncertainty and divisive politics within UK
• Re-election of Tusk increases the likelihood of tough EU stance on Brexit negotiations
• BoE is unlikely to alter policy with Brexit uncertainties appearing to rise and data into 2017 softening

Please note that the entry level for last week's AUD/NZD trade (1.0855) was not met, whilst the EUR/USD short was stopped out."