GBPAUD has been trending lower, moving inside a descending channel on its 4-hour chart.

The recent rally has allowed price to test the channel resistance once more, possibly bringing it back down to the lows at the 1.5800 handle or until the channel support.

Price is also finding resistance around the 50% Fibonacci retracement level at the 1.6800 mark, which lines up with a broken support. However, the 100 SMA seems to be crossing above the longer-term 200 SMA to indicate that buyers are about to take control of price action.

Stochastic is indicating overbought conditions, though, so a downward move might be due. In this case, bearish pressure could pick up and force the rally to reverse. A break past the 61.8% Fib, on the other hand, could confirm that bulls have won over.

UK retail sales came in much stronger than expected, reflecting a 1.9% jump in consumer spending versus the projected 0.5% uptick. The previous report was also upgraded to show a 0.1% uptick from the previously reported flat reading. 

Prior to this, UK reports were mostly weaker than expected, as the CPI reports printed declines instead of small upticks from the pound’s depreciation. Jobs data was also weaker than expected as claimants rose but the jobless rate improved to record lows.

Meanwhile, data from Australia was also weaker than expected, as the employment change report showed a 9.8K increase versus the projected 20.3K gain. There are no reports due from Australia or the UK today but BOE members have testimonies lined up.

By Kate Curtis from Trader’s Way