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Risk appetite seems to be favoring commodity currencies these days, so I’m watching out for a triangle breakdown on this pair.

How low can it go?

Before we look at the setup, let’s review how the major currency pairs fared in the previous sessions and what catalysts pushed ’em around!

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

Upcoming Potential Catalysts on the Economic Calendar:

  • German retail sales at 8:00 am GMT
  • Swiss CPI at 8:30 am GMT
  • Spanish unemployment change at 9:00 am GMT
  • German unemployment change at 9:55 am GMT
  • OPEC-JMMC meetings to resume later in the day

What to Watch: GBP/AUD

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

Who’s in for a triangle breakout?

GBP/AUD looks primed for a move below its symmetrical triangle consolidation pattern, as the price is hanging out around the bottom of the chart pattern formation.

Technical indicators also confirm that further losses are likely. Stochastic is pointing down while the 100 SMA is below the 200 SMA to reflect bearish pressure.

A break below the current levels could send the pair crashing by roughly the same height as the chart pattern, which spans around 500 pips.

There are no major reports due from the U.K. economy in the upcoming London session, but it’s worth noting that PM Johnson announced new lockdown measures to curb the spread of the new COVID-19 strain.

Meanwhile, the Land Down Under still seems to be doing a relatively fine job of keeping coronavirus cases in check. Risk sentiment also appears to favor higher-yielders lately, as traders focus on vaccine distribution updates and stimulus efforts.