All eyes and ears are on the BOE statement today!
That’s why I’m keeping close tabs on this triangle pattern on GBP/AUD, waiting for a possible breakout.
Which way do you think it will go?
GBP/AUD: 4-hour
This pair has been stuck inside this descending triangle pattern for the past couple of months, and it looks like another test of support is in the works.
Will it go for a breakout this time?
It could all boil down to the upcoming BOE decision, as the U.K. central bank might disappoint the markets with a measly 0.25% hike.
You see, while its peers are putting the pedal to the metal when it comes to policy tightening, the BOE seems to be taking its own sweet time… even with annual inflation moving dangerously close to 10%!
Unless BOE policymakers step up their game, pound traders might once again be left unimpressed, possibly leading to a triangle breakdown for GBP/AUD.
In that case, the pair might be in for a selloff that’s roughly the same height as the triangle, which spans around 900 pips.
Technical indicators are looking mixed for now, but moving averages appear to be supporting a bearish move. Stochastic, on the other hand, is reflecting exhaustion among sellers.
If you’re planning on trading this top-tier event, just make sure to adjust for additional GBP volatility!
