GBPAUD formed lower highs and higher lows, creating a symmetrical triangle formation on the 4-hour time frame.

Price is starting to break past the triangle resistance, signaling that pound bulls are taking control of price action and could push for more gains.

Stochastic is heading north to show that buyers are on top of the game, but the oscillator is nearing the overbought zone to signal potential weakness in buying pressure. If sellers take over, price could pull back to the top of the triangle or probably even make another move towards support.

The 100 SMA is below the 200 SMA, also indicating that the path of least resistance is to the downside. In addition, the 100 SMA seems to be holding as dynamic resistance at the moment.

UK data came in stronger than expected as the services PMI climbed from 53.3 to 55.0, higher than the consensus at 53.5. Prior to this, the RBA statement turned out less upbeat than expected as the central bank emphasized the weakness in the jobs sector. Australian retail sales also missed expectations while the trade balance came in stronger than expected.

There’s not much in the way of top-tier data from the UK or Australia today so consolidation could still take place. However, China just reported a weaker than expected Caixin services PMI, which could signal weaker demand for Australia’s raw material products. UK manufacturing production and a speech by BOE Governor Carney are lined up on Friday.

By Kate Curtis from Trader’s Way