We’ve got Australia’s jobs data coming up soon!
Can this spur a triangle breakout for GBP/AUD? And just how high can the pair go if that happens?
GBP/AUD: 1-hour
GBP/AUD 1-hour Forex Chart by TV
Check out this forex pair testing the very top of its descending triangle pattern!
On the hourly time frame, you can see that GBP/AUD has consolidated with its lower highs and support near the 1.8600 major psychological mark for the entire month of May.
Now price has formed higher lows ever since the last bounce off the triangle bottom, suggesting that bullish pressure is building up.This means that GBP/AUD could bust through the resistance near the 1.8750 handle any day now, especially with a strong catalyst.
While the U.K. jobs report turned out weaker than expected earlier today, this might not be enough to prevent pound bulls from pricing in another BOE hike. After all, the U.K. continues to struggle with stubbornly high inflation.
Also, it’s worth noting that China just printed mostly downbeat economic data, which could weigh on both risk appetite and the commodity-driven AUD.
Australia has its April 2023 employment report coming up, and number crunchers are projecting a much slower pace of hiring for the month.
A weaker than expected read might be enough to dash future RBA tightening hopes, likely leading to more losses for the Australian dollar.
If that happens, GBP/AUD could sustain its climb up to the next resistance zones at R1 (1.8810), R2 (1.8890), or even R3 (1.9000) that are all close to major psychological levels.
Don’t forget, though, that this pair moves an average of 140 pips per day, which makes for a reasonable profit target.
For now, the 100 SMA is below the 200 SMA to suggest that bears are still in control, but the gap between the moving averages has narrowed to hint that a crossover is in the works.
Also, Stochastic is still heading north and has some ground to cover before reflecting exhaustion among buyers.
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