The pound found firmer ground against the Aussie this week, and a key technical zone may do the rest of the heavy lifting.
Can bulls push this pair back to the top of its channel ahead of Thursday’s BOE decision?
Here’s what we’re seeing on the 4-hour time frame!
GBP/AUD: 4-hour
GBP/AUD 4-hour Forex Chart Faster with TradingView
Australian CPI rose 3.8% y/y in June, below the 4.0% forecast, cooling expectations for another RBA hike anytime soon. The miss gave traders another reason to sell the Aussie, which had already been losing ground against Sterling this week.
Meanwhile, traders see the BOE keeping its rates at 3.75%, after June’s 7-2 hold saw Megan Greene and Huw Pill favor a hike to 4.00%. A hawkish hold or a shift in the vote split could give Sterling bulls fresh momentum.
GBP/AUD, which had been climbing inside an ascending channel pattern since mid-May, looks ready to extend its trend. After peaking near the 1.9300s earlier this month, the pair pulled back toward channel support and the 61.8% Fibonacci retracement near the 1.9000 psychological handle.Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie homework on the British pound and the Australian dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
If GBP/AUD holds above support and the BOE delivers a hawkish message or a shift in the vote split, the pair could extend toward R1 at 1.9242. A clean break above that level would bring R2 at 1.9410 into focus, near the top of the channel and above July’s highs.
If the bounce fades and price breaks below the Fibonacci level and channel support, the setup starts to weaken. S1 at 1.8973 would be the next level to watch, followed by S2 at 1.8874 near the channel base.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment!
The GBP/AUD setup rests on a level where channel support and the 61.8% Fibonacci retracement coincide, and if the idea of confluence is unfamiliar, our lesson covers what makes that overlap significant. Premium members can read our lesson:
📖 Confluence: Stacking the Odds in Your Favor
Reading this helps you understand how to score a price action setup before you take it, why overlapping technical factors increase setup quality, and how to decide which confluence zones are worth trading before price even gets there.
And if you’re not a Premium subscriber yet, now’s a good time to sign up.
With Babypips Premium, you get full access to School of Pipsology lessons that help you understand not just what the chart is showing, but how to weigh the technical factors that make one setup stronger than another.
