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I’m keeping my eye on this pair for another trading session as resistance seems to be holding well.

A bit of risk appetite appears to be returning to the markets, allowing the Aussie to stay afloat even with a fresh set of restrictions in place.

Before we look at GBP/AUD’s setup, check out the Asian session headlines that you might have missed:

Currency Snapshot

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

Fresh Market Headlines & Economic Data:

Upcoming Potential Catalysts on the Economic Calendar:

  • German trade balance at 7:00 am GMT
  • Japanese preliminary machine tool orders at 7:00 am GMT
  • Eurogroup meetings to kick off today

What to Watch: GBP/AUD

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

It looks like this pair just didn’t have enough bullish energy to bust through the range resistance around the 1.8100 handle, so it might retreat to nearby support areas instead.

With no major economic release on tap in the upcoming London session, traders could react mostly to overall market sentiment in the next few hours.

Risk-on flows appear to be in play lately as upbeat figures from China had traders focusing on recovery hopes once more.

In addition, positive earnings expectations are keeping traders hungry for more risk, which could be bullish for the higher-yielding Aussie.

In that case, GBP/AUD could make its way back to the bottom of the range around the 1.7900 major psychological mark or at least until the middle at the 1.8000 handle.

Stochastic is still heading south after all, which means that sellers have the upper hand. Looking at the average daily GBP/AUD volatility suggests that the pair could move close to 150 pips for the day.

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