We have Australian jobs data coming soon!
Could this trigger a triangle breakout for GBP/AUD? And how high is the pair if that happens?
Forex GBP/AUD 1 hour Planned by TV
Check out this forex pair which is testing the top of the descending triangle pattern!
On the hourly timeframe, you can see that the GBP/AUD has consolidated with lower tops and support near the key psychological mark of 1.8600 for the whole month of May.
The price has now formed higher lows since the last bounce from the bottom of the triangle, which indicates that upward pressure is building.
This means that GBP/AUD could breach the resistance near 1.8750 any day now, especially with a strong catalyst.
And while the UK jobs report came out weaker than expected earlier in the day, this may not be enough to stop the GBP bulls from pricing another rise in the Bank of England. After all, the UK continues to struggle with stubbornly high inflation.
Also, it’s worth noting that China just printed mostly pessimistic economic data, which could affect both risk appetite and the commodity-driven Australian dollar.
Australia has Employment report for the month of April 2023 coming soon, and numbers crunching companies are predicting a much slower hiring pace for this month.
A weaker-than-expected reading could be enough to dash the RBA’s hawkish hopes for the future, likely leading to more losses for the Australian dollar.
If that happens, the GBP/AUD could continue to climb to the next resistance areas at R1 (1.8810), R2 (1.8890), or even R3 (1.9000) which are all approaching key psychological levels.
Don’t forget, however, that this pair moves by size Average 140 pips per daywhich makes the profit target reasonable.
For now, the 100 SMA is below the 200 SMA to indicate that the bears are still in control, but the gap between the moving averages has narrowed to hint that a cross is at work.
Also, the stochastic is still heading north and has some ground to cover before it reverses exhaustion among the buyers.
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