Thanks to BOE Governor Carney’s hints that the UK central bank is looking to hike interest rates earlier than markets expect, GBP/AUD has made a strong convincing bounce off the range support visible on its 4-hour forex chart.
Stochastic is also moving higher, indicating that there is enough buying pressure to pus the pair towards the middle of the range and beyond. Jobs data from the UK has been much stronger than expected while Australia’s labor reports have been weak, adding further confirmation that the rally could continue.
Going long at the current levels with a stop below the range support and a target at the range resistance at 1.8300 could yield a 2:1 return on risk for a swing trade.
By Kate Curtis from Trader’s Way