I’m seeing this extra neat uptrend setup on the long-term chart of GBP/AUD, but I’m still checking if fundamentals line up. Got any thoughts to share?
Long GBP/AUD Idea
This pair has been cruising inside a solid ascending channel since late 2016, so my gut tells me that support might hold like a boss again. If so, the pair could bounce right back up to the very top past 1.9000 or at least until the mid-channel area of interest.
Stochastic is pointing up to confirm that bullish momentum is still present, but the oscillator is nearing the overbought region to reflect exhaustion. Turning lower could mean that sellers might return and push for a break below support.
This means I gotta take a closer look at long-term fundamentals to see which direction GBP/AUD is likely to take.
For one, the possibility of a “no deal” Brexit is becoming all too real, so this could mean further weakness for the U.K. economy and even a BOE interest rate cut.Then again, it seems that market participants have already priced in this possibility for a while now and are turning their focus to how businesses are planning to weather the storm.
As for the Aussie, the latest round of tariffs announced by Trump last week could keep the RBA in easing mode. Recall that the Australian central bank already cut rates twice this year, so the prospect of another one could mean more losses for the currency.
I haven’t set entry orders yet, but I’m looking to go long past the 1.8000 major psychological mark and aim for the long-term channel top. I’ll be moving my stop just above entry to lock in some gains once the pair reaches the mid-channel area of interest.
What do you guys think?
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