End of the week brings us the long-awaited US job data — non-farm payrolls — which will naturally dominate attention and create sharp moves on the US dollar. But not every trader wants to step into dollar volatility on payroll Friday. For those looking elsewhere, the British Pound to Australian Dollar (GBP/AUD) is offering an interesting setup.
The pair recently escaped from a channel down formation to the upside, giving buyers a glimpse of optimism. However, that breakout is now proving unreliable. The price failed to hold above the orange horizontal support and has slipped back inside the channel down structure. This raises a red flag for bulls.
False breakouts often provide powerful signals in the opposite direction. If GBP/AUD ends the day trading low inside the channel, that would confirm the failed breakout and deliver a proper technical sell signal. Sellers could then target deeper levels within the channel as bearish momentum regains control.