GBP/AUD is currently forming a potential bullish continuation pattern, suggesting a possible breakout after its recent rally. The pair's movement is influenced by several upcoming economic events, including the Reserve Bank of Australia's (RBA) September meeting minutes and Australian unemployment data. These events could challenge the current hawkish pricing of the RBA, which has been pricing in a relatively aggressive tightening cycle. The RBA's September policy statement was hawkish, raising the cash rate by 25 basis points to 4.60%, but Governor Michele Bullock's subsequent press conference struck a less hawkish tone, acknowledging weakness in Australia's housing market.
The UK side of the equation is also in focus, with markets pricing a 90% probability of a 25-basis-point Bank of England rate hike in November. Governor Andrew Bailey's upcoming speeches could provide further clarity on the BoE's stance. Additionally, broader risk appetite, as proxied by S&P 500 futures, has shown a modest inverse correlation with GBP/AUD, suggesting that any deterioration in risk appetite could also influence the pair.
Technically, GBP/AUD has formed a falling wedge pattern since early October, a bullish continuation pattern. The price is currently testing the upper end of this structure, with a sustained breakout potentially targeting the 1.91157 level. However, if the breakout fails, support levels to watch include 1.89327 and 1.89177. The oscillators are currently neutral, emphasizing the importance of price action in assessing potential trade setups.