- GBP/AUD is in a concerted downtrend which is likely to extend further down to a target at 1.75

- The main release for the Pound is Manufacturing PMI on Friday

- The Australian Dollar has several second-tier releases cover housing and private sector credit

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GBP/AUD is trading at 1.7616 on the interbank markets as the new week begins.

The pair has continued to fall as a result of the Pound weakening, mainly, due to declining expectations that the Bank of England (BOE) will raise interest rates soon.

Previously the markets had expected several rate rises in 2018 but now they are less certain due to stuttering growth and continued Brexit uncertainty.

We see potential for GBP/AUD to continue its slide down to 1.7500, just above the 200-day moving average (MA) at 1.7483, but at that point, it will probably stall and possibly even reverse and start rising higher.

A break below the 1.7589 lows would lead to a continuation down to the aforementioned target.

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AUD - What to Watch

Housing tends to 'lead the economy' as the old saying goes so whilst a single data print is unlikely to induce volatility, longer-term trends can if they develop. New Home Sales in May are also out on Friday.

On Thursday, Private Sector Credit is expected to rise by 0.4% in April and New Capital Expenditure by 0.7%, when released at 02.30.

Credit tends to fuel growth, cause inflation and often lead to higher interest rates, which tend to have an appreciative effect on the local currency.

Other data includes the AIG Manufacturing Index for May, which is out at 23.30.

GBP - What to Watch

The manufacturing PMI is an index score generated from survey responses of key business managers in the sector. It is a fairly reliable leading indicator of growth. A higher-than-expected result would probably push the Pound higher versus the Euro, especially if the final Eurozone Manufacturing PMI result, which is out only a half an hour earlier, continues to show a contrasting move down.

The busiest day is probably Thursday, May 31, when the Nationwide House Price Index (HPI) is scheduled for release at 7.00, followed by third-tier releases at 8.30 covering credit and lending, such as Net Lending to Individuals, Consumer Credit and Mortgage Approvals; and also M4 Money Supply (all for April).

Another significant release in the week ahead is Consumer Confidence, which is out at 23.01 on Wednesday. Experts are forecasting a slight recovery in to -8 from -9 previously. The release is often a good barometer of future trends in the economy given the disproportionate importance of consumers in the UK economy.

The British Retail Consortium's (BRC's) Shop Price Index, meanwhile is out at 23.01 on Tuesday evening.

Apart from hard data, there may be a lot of focus on Brexit as the EU summit in June to decide the next stages of the process gets nearer.

"Through the remaining four days Brexit may see a renewed focus ahead of the 28-29 June EU Leaders’ Summit. There have been some reports that talks with Brussels will begin again on Tuesday. Meanwhile, the Tory party has been put on notice for an early June return of the EU Withdrawal Bill to the House of Commons after its spell in the Lords," says Victoria Clarke, an analyst at Investec.

Get up to 5% more foreign exchange by using a specialist provider to get closer to the real market rate and avoid the gaping spreads charged by your bank when providing currency. Learn more here.