FxWirePro: Bullish and bearish scenarios of GBP/AUD

Bearish Sterling Scenarios:  

1) Growth slows below 1% as consumers are squeezed by inflation and falling house prices.

2) Outright capital repatriation from slower moving long-term investors including central banks.

3) Initial Brexit talks flounder on the size of the UK's exit-bill.

Bullish Sterling Scenarios:

1) The govt pursues a lengthy transitional deal with the EU which maintains the trade status quo for 2-3 years.

2) The economy rebounds to 2.0-2.5%.

3) 2-3 MPC members dissent for tighter policy at the Aug MPC/QIR,

4) Current a/c deficit shrinks below 2%.

Bearish AUD Scenarios:

1) The unemployment rate breaks above 6%, forcing the RBA to respond more aggressively to weak inflation;

2) The Fed responds to animal spirits and bullish survey data by delivering a faster pace of hikes than currently expected;

3) China data weaken materially, validating the fall in commodity prices.

Bullish AUD Scenarios:

1) China eases policy and commodities rebound;

2) The Fed’s tightening timeline is severely disrupted by a weakening in local data; or

3) The Australian housing market reaccelerates.

Overall, the major trend has been bearish bias, while FxWirePro's hourly GBP spot index has turned into -55 (which is bearish while articulating), and hourly AUD spot index was at shy above 55 (bullish). For more details on the index, please refer below weblink:

http://www.fxwirepro.com/currencyindex