Forex Trade Idea: GBP/AUD Short-Term Channel

With the BOE Super Thursday coming up, I’ve been on the hunt for short pound forex setups lately since I’m expecting a lot of dovish remarks from head honcho Carney and his gang of policymakers

I’ve decided to turn my attention to GBP/AUD since the pair is on a steady downtrend on its 1-hour forex time frame. Price is already testing the channel resistance around the 2.0300 major psychological mark and might be ready to resume its drop, especially since the U.K. construction PMI came in below expectations today.

GBP/AUD 1-hour Forex Chart

GBP/AUD 1-hour Forex Chart

As for the Australian dollar, the RBA’s decision to keep interest rates on hold for now led to a slight pop higher, as traders were probably relieved that the central bank didn’t ease just yet. Aside from that, the official statement contained a bit of optimism about the economy, as policymakers highlighted the improvements in the non-mining sector, business conditions, and lending. That leaves forex junkies to price in their expectations for the BOE statement, Inflation Report, and MPC meeting minutes.

I’m considering a short entry around the current levels with a wide 300-pip stop above the channel and the 2.0500 major psychological mark. If the trade goes my way, I’ll set my sights on the channel support just above 1.9900. I plan on risking 0.5% of my account on this setup so make sure you check out our risk disclosure if you’re thinking of joining me.

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