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GBP/AUD recently bounced and ran into big resistance at a major psychological level. Is it time for sellers to take back control?

GBP/AUD Downtrend to Resume?

GBP/AUD 4-Hour Forex Chart
GBP/AUD 4-Hour Forex Chart

On the four hour chart above of GBP/AUD, we can see the pair has been in a recent uptrend after bottoming out just under the 1.7500 psychological level at the beginning 2021. Sterling recovered a bit after the New Year as focus shifted away from Brexit drama, while the Aussie tumbled a bit in the second half of January and beginning of February as risk sentiment shifted somewhat negative on rising fears of coronavirus variants.

But the pair ran in to the 1.8000 major psychological level, which has been an area of strong interest in the past, providing massive support at the end of 2020 and big resistance in the past week. Enough so that GBP/AUD is now retesting the rising ‘lows’ pattern marked on the chart above. So, are sellers back in control? Or is this another opportunity for a short-term bullish play?

Well, we’ve got the latest Australian jobs data coming next week, and if that surprises positively like how New Zealand did with their recent positive employment update, then the rising ‘lows’ pattern may break and draw in more GBP/AUD bears. This is the likely scenario for now, especially if the overall “recovery” theme continues to be the biggest market driver.

For now, we’re watching to see if this area breaks or bounces, and even if it breaks lower before the Australian jobs update, that may likely draw in technical traders looking to play the longer-term trend lower.

What do you all think? Are you watching GBP/AUD for a potential longer-term short position trade? Or do you think this is the time to get in long? Let me know in the comments section below!

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