The breakout trade in GBP/AUD has hit its first target at the 1.8578 level, where the channel top is offering additional resistance.
Despite the moves lower in GBP today, GBP/AUD is holding up currently, with price action suggesting there is still good demand for the pair.
The retail community is currently around 80% long, suggesting plenty of scope for a continuation higher towards the next target at 1.8739 while we hold above the 1.8438 breakout base.
Keep An Eye On the Northern Ireland Protocol
Today’s political meeting over the Northern Ireland Protocol has the potential to create volatility in GBP.
However, given that US dollar strength is weighing on AUD more than GBP and that central bank expectations are far more hawkish for the Bank of England (BoE) than the Reserve Bank of Australia (RBA) in the near term, GBP/AUD has the ingredients to remain a good long trade into next week.
