The GBP/AUD pair is struggling to find direction after hitting technical resistance late last week.
In case you missed it, the release of the US Non-Farm Payrolls report on Friday caused a spike in volatility among the major currencies of the US Dollar.
Among volatile currencies, the British pound outperformed commodity-linked currencies such as the Australian dollar after net positive UK PMI reports.
Sterling's strength over the major currencies extended into this week when even the release of weak UK labor market data did not keep sterling in the red against the Australian dollar, Canadian dollar and New Zealand dollar for long.
Remember that directional biases and volatility conditions in market prices are usually driven by fundamentals. If you haven't done your financial homework on the GBP and AUD yet, it's time to check the economic calendar and stay up to date with daily essential news!
GBP/AUD Forex 4 Hours Chart by TradingView
Since then, GBP/AUD has traded lower after hitting resistance at the 1.9350 area. The pair is now trading near 1.9250 – 1.9300, which is not too far from the pivot point (1.9249) and previous resistance levels in the 4-hour time frame.
More importantly, GBP/AUD levels are in line with the middle channel area on the chart.
Will the pair continue its upward trend during the upcoming trading sessions?
A few bullish candles from its current levels could attract enough buyers to push it back to the highs at 1.9350 if not the R1 pivot point line (1.9405) near the top of the ascending channel pattern.
But if this week's headlines continue to dampen the bullish outlook for GBP/AUD, the pair could see a deeper pullback before the bulls intervene. There may be a move to the S1 pivot point line (1.9162) near the channel and 200 SMA support area. Table if GBP/AUD is trading below the PP area and the middle channel area.
what do you think? Will GBP/AUD extend its uptrend from current levels? Or will the pair see downward pressure before seeing sustained upward demand?