Partner Center Find a Broker

Pound bulls have the U.K. CPI release to look forward to this week, as another pickup in price pressures could seal the deal for a BOE hike.

This is why I’ve got this GBP/AUD triangle on my watchlist this week!

Think it’ll break higher soon?

GBP/AUD: 4-hour

GBP/AUD 4-hour Forex Chart
GBP/AUD 4-hour Forex Chart

If you’re placing your bets early for the U.K. inflation report due later this week, you should know that this pound pair is already attempting a breakout!

GBP/AUD formed higher lows and found resistance at the 1.8950 minor psychological mark, creating an ascending triangle on its 4-hour chart.

Price barely even dipped to the bottom before trying to bust above the triangle top, which means that pound bulls are eager to charge.

If they are able to sustain the climb, we might just see a rally that’s at least the same height as the chart formation. That’s roughly 800 pips, you guys!

The bullish moving average crossover is supporting this idea, but I’m a bit worried about Stochastic indicating overbought conditions at the moment. Turning lower might still encourage sellers to drag GBP/AUD back to the triangle bottom, so I’d be careful for now.

A move past the recent highs or maybe the 1.9000 major psychological mark might be enough to secure a bullish break, though.

Don’t forget that the U.K. CPI is due on Wednesday, and an uptick from 5.1% to 5.2% is eyed for the headline reading.

That would keep annual inflation at its highest in ten years and at twice the BOE’s target level. If that doesn’t pressure them to act, I don’t know what will!

Still, there’s a pretty good chance that traders have already priced in this scenario for a while and that we’d see some good ol’ profit-taking during the actual release.

Anyone also looking to hop in a long pound position?

This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.