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Price action has been tightening up on GBP/AUD, but is there a break ahead with the Australian jobs data ahead?

GBP/AUD Consolidation Break?

GBP/AUD 1-Hour Forex Chart
GBP/AUD 1-Hour Forex Chart

GBP/AUD ran up to the top of my watchlist for a potential short-term trade as we may see potential volatility from the upcoming Australian employment update.

Expectations are for the jobs situation in Oz to show another round of weakness, which means bears could be showing up on the Aussie dollar to price in future simulative moves from the RBA and/or negative economic updates down the road.

I’m looking to play this idea against the British pound, which is starting to find its bullish legs, possibly on a few positive headlines today including rhetoric from the EU that we may see a Brexit deal soon, an optimistic outlook from the Bank of England’s Chief Economist Andrew Haldane, or from a slight uptick in U.K. inflation data. Whatever the case may be for Sterling’s support, that could remain this week with no major catalysts expected this week from the U.K.

So, I’d like to play the consolidation pattern marked on the chart above with a potential long play, but instead of putting orders up right away, I’m setting up an alert to notify me if the falling ‘highs’ pattern has been broken. If the market does break to the upside, I’d like to see what the data says first and see what kind of risk environment we’re in before committing to a long position.

If the fundies line up with the price action, I will set orders for a buy position in my next post, so until then, we’re in wait-and-see mode for now.

What do you guys think? Better to wait for a confirmation pattern or set orders right now. As always, remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly. Create your own ideas and don’t simply follow what I do.

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