GBP/AUD looks ready to break above a range pattern!
And why not? The pound is one of the biggest fiat gainers so far this week as European investors cheered the authorities stepping in to contain banking sector concerns.
It also helped that, so far, no U.K. banks availed of the major central banks’ new measures to help USD liquidity.
On the other side of the trade, a Reserve Bank of Australia (RBA) meeting minutes printed earlier showed that members had discussed pausing their rate hikes in March. This supported the case of a pause in tightening as early as April.
GBP/AUD: 1-hour
The increased demand for GBP and weaker demand for AUD is translating to a possible upside breakout for GBP/AUD.
As you can see on the 1-hour time frame, an ascending trend line and the 100 and 200 SMAs have been supporting an uptrend since late February.
GBP/AUD lost some momentum last week, however, and the pair was locked in a ranging pattern.
Will today’s market themes push GBP/AUD back to its uptrend?
The pair is currently trading near 1.8325, which is above December’s 1.8250 highs and the 1.8300 psychological handle.
If GBP/AUD breaks above the range, then we could see the pair revisit its 1.8450 or 1.8630 previous areas of interest.
But if we see another major European bank take hits this week, or if a commodities-friendly environment pushes AUD higher, then GBP/AUD could dip back to the SMAs or its trend line support.
