The U.K.’s first GDP reading for Q4 2019, Powell’s testimony, and Carney’s presser are all due within the next trading sessions, so I figured we should look at Cable’s chart today.
Fresh Market Headlines & Economic Data:
- Japan’s markets out on National Foundation Day holiday
- Coronavirus live update: China’s death toll exceeds 1,000
- Reuters: hundreds of Chinese businesses seek billions in loans to contend with coronavirus
- Trump: “we should have a lower Fed rate right now”
- UK shoppers still wary about spending in January: BRC
- NAB business confidence inches up from -2 to -1
- NAB business conditions unchanged at +3 in January
- NAB: survey continues to suggest little to no growth in the private sector
Upcoming Potential Catalysts on the Forex Calendar:
- U.K.’s preliminary GDP at 9:30 am GMT
- U.K.’s manufacturing production at 9:30 am GMT
- U.K.’s goods trade balance at 9:30 am GMT
- U.K.’s industrial production at 9:30 am GMT
- U.S. NFIB small business index at 11:00 am GMT
What to Watch: GBP/USD
The most closely watched headline in today’s London session is the U.K.’s first GDP reading, which is expected at 0.0% after a 0.4% reading in Q3 2019.If today’s data misses its already weak expectations (there was a lot of uncertainty until the mid-December General Elections), then we could see GBP/USD drop below its 1.2875 weekly lows and maybe even make a run for the 1.2830 previous area of interest. This is still possible given Cable’s daily ATR and its move so far today.
If today’s data dump allows the BOE to avoid the dove camp for a while longer, then Cable could revisit its 1.2970 broken support before submitting to other economic catalysts.
Speaking of, Fed’s Powell will talk economy in D.C. during the U.S. session. He will likely repeat the Fed’s growth optimism and concerns over low inflation but traders will also want to hear about the impact of Coronavirus and maybe his reaction to Trump’s latest calls for lower interest rates.