GBP/AUD is consolidating inside a descending triangle pattern, showing a potential range play for short-term traders or a possible breakout and longer-term bias for swing traders.

Price is just testing the top of the triangle with stochastic moving down from the overbought zone. This suggests that price could move back to the bottom of the triangle near the 1.8050 minor psychological level for another potential bounce. A breakout in either direction could last by as much as 200 pips, which is the same height as the chart pattern.

Watch out for significant breaks past the 1.8100 mark for a possible long-term rally or a break below the 1.8050 area for a potential selloff.

By Kate Curtis from Trader’s Way