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With the polls in the U.K. about to close soon, I’m expecting a bit more volatility that could trigger this setup on GBP/AUD.

Currency Snapshot:

Major Forex Pairs Performance from MarketMilk
Major Forex Pairs Performance from MarketMilk

Fresh Market Headlines & Economic Data:

Upcoming Potential Catalysts on the Forex Calendar:

  • SNB monetary policy statement at 9:30 am GMT
  • Euro zone industrial production at 11:00 am GMT
  • ECB monetary policy decision at 1:45 pm GMT
  • ECB press conference at 2:30 pm GMT
  • U.K. parliamentary elections ongoing

What to Watch: GBP/AUD

GBP/AUD 1-hour Forex Chart
GBP/AUD 1-hour Forex Chart

All eyes and ears are on the U.K. parliamentary elections as polls are about to close soon and likely indicate a win by Conservatives. However, there are still some worries that they might not be able to secure enough seats for a majority.

Apart from that, profit-taking or a “buy the rumor, sell the news” situation may be in order after the official results are announced, likely allowing this pair to retreat to lower support areas.

GBP/AUD could pull back to the 50% Fib near the 1.9150 minor psychological mark or the 61.8% level that coincides with a short-term rising trend line. Stochastic is already on its way up, though, to confirm that bullish pressure is in play. Also, moving averages reflect a bullish trend.

GBP/AUD Trend from MarketMilk
GBP/AUD Trend from MarketMilk

A buy limit order at the 1.9085 mark could be enough to weather election-related volatility, unless of course the actual results suggest further political uncertainty or the possibility of a hung parliament.

Not sure how big your stop losses should be? Here’s GBP/AUD’s average volatility per day:

GBP/AUD Volatility from MarketMilk
GBP/AUD Volatility from MarketMilk