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The U.K. is printing a couple of lower tier reports today, which could turn traders’ focus to the pound as a risk trade.

Think today’s themes will extend GBP/USD’s uptrend?

Before I show you today’s setup, lemme list down the biggest headlines of the Asian session:

Currency Snapshot

Major Forex Pairs Price Performance from MarketMilk
Major Forex Pairs Price Performance from MarketMilk

Fresh Market Headlines & Economic Data:

Upcoming Potential Catalysts on the Economic Calendar:

  • French markets out on National Day holiday
  • U.K.’s monthly GDP at 6:00 am GMT
  • U.K.’s industrial and manufacturing production at 6:00 am GMT
  • Eurozone’s industrial production at 9:00 am GMT
  • U.S. CPI numbers at 12:30 pm GMT

What to Watch: GBP/USD

GBP/USD 1-hour Forex Chart
GBP/USD 1-hour Forex Chart

GBP/USD is consolidating around the 1.2550 minor psychological level, which also lines up with the 1-hour chart’s 200 SMA and an ascending channel support that’s been valid since the start of the month.

With an average daily volatility of around 100 pips and a couple of U.K. reports on tap, we could see some action from the pair today.

For starters, the U.K. is expected to print a slightly better GDP in May while industrial and manufacturing production numbers are also seen with higher readings.

Risk trading can also factor in as major economies like the U.S. and Australia struggle with reopening economies. European countries like France and Italy are getting ready to announce stimulus programs, however, so we could see some risk-taking especially after China’s trade data surprised to the upside.

If risk sentiment improves in the next couple of hours, then we could see Cable pop back up to the 1.2600 or 1.2650 resistance levels.

If the U.K. prints disappointing lower-tier reports, however, or if risk aversion continues to limit the demand for high-yielding currencies, then GBP/USD could break below the 200 SMA and hit previous support levels closer to 1.2500 or 1.2450.