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EUR/GBP makes it to the top of the watchlist as the pair retests a major psychological level ahead of economic updates from both the eurozone and the U.K.

Before moving on, ICYMI, today’s Daily U.S. Session Watchlist looked at EUR/USD ahead of the FOMC event, so be sure to check that out to see if there is still a potential play!

Intermarket Update:

Equity Markets Bond Yields Commodities & Crypto
DAX: 15570.36 +0.33%
FTSE: 7016.63 +0.29%
S&P 500: 4400.64 -0.02%
NASDAQ: 14762.58 +0.70%
US 10-YR: 1.233% -0.001
Bund 10-YR: -0.454% -0.007
UK 10-YR: 0.56% +0.00
JPN 10-YR: 0.014% -0.005
Oil: 72.22 +0.79%
Gold: 1,808.6 +0.489%
Bitcoin: $40,253.75 6.34%
Ethereum: $2,304.78 +2.91%

Fresh Market Headlines & Economic Data:

S&P 500 closes flat as Fed keeps easy policies, Alphabet and Boeing shares jump

Fed holds rates near zero, says economy has gotten better even with pandemic worries

Gold ekes out gains in choppy trade as investors digest Fed strategy

U.S. Senate to vote on infrastructure after bipartisan breakthrough

U.S. mortgage applications rise in latest week as rates decline

U.S. goods trade deficit widens on imports; inventories increase

Canada Annual CPI Decelerates to 3.1% in June

Oil rises on U.S. fuel drawdowns despite surging coronavirus cases

Bitcoin in Longest Winning Streak in 2021 as Crypto Rebounds

XRP hits 5-week high after launching liquidity service in Japan

Upcoming Potential Catalysts on the Economic Calendar

Australia Business Confidence at 1:00 am GMT (July 29)
Australia Export & Import prices at 1:30 am GMT (July 29)
France PPI at 6:45 am GMT (July 29)
Spain Unemployment & Inflation Rate at 7:00 am GMT (July 29)
Germany Unemployment Rate at 7:55 am GMT (July 29)
U.K. Mortgage Approvals, Net Lending at 8:30 am GMT (July 29)
Euro Area Business & Consumer Sentiment, Inflation Expectations at 9:00 am GMT (July 29)
Italy PPI at 9:00 am GMT (July 29)
Germany Inflation Rate at 12:00 pm GMT (July 29)

If you’re not familiar with the forex market’s main trading sessions, check out our Forex Market Hours tool.

What to Watch: EUR/GBP

EUR/GBP 1-Hour Forex Chart
EUR/GBP 1-Hour Forex Chart

On the one-hour chart of EUR/GBP above, price action has been in favor of the bears in late July after the pair rallied up to the 0.8650 minor psychological area and finding resistance there.

That brings the market to the previous swing low at the major psychological level of 0.8500, where we may see short-term buying support and a little bit of volatility as traders battle it out, as pointed out by Big Pippin on the higher timeframes

Traders may also see a lift in volatility from the forex calendar as the schedule is relatively heavy with European economic updates, as well as a few from the U.K.

These are not major catalysts, but given that they’re the right mix of sentiment, employment, and inflation updates, they may spark short-term movement in the pair for potentially quick pips to capture.

Given that the longer-term trend is to the downside, we’ll be watching price action for a sustained break below 0.8500 for a potential swing short setup if European data disappoints and/or U.K. data is positive.

But if we see the opposite outcome in terms of the economic data, then a bounce from 0.8500 may draw in enough buyers to take the pair back to the next level of interest around the 0.8550 area.

Countertrend traders may want to check out this scenario for potential quick pips, but watch out for a reversal setup at 0.8550 because of the longer-term trend lower.