The Aussie may have grabbed the headlines in Asian session trading but I have a feeling that we’ll soon see volatility from the British pound. Here’s why I’m looking at Cable today.
Fresh Market Headlines & Economic Data:
- Australia records another current account surplus in Q4 2019
- Australia’s dwelling approvals moderate in January
- RBA Cuts Rates to 0.5% as China Slowdown Continues
- Asia stocks edge higher as RBA cuts cash rate to new record low
- Oil extends gains amid optimism for coordinated effort to offset virus
- Japan’s Abe says ready to top up fiscal spending if coronavirus hits economy
- Yen climbs as hopes for G7 rescue waver
- Japan consumer confidence falls in February
Upcoming Potential Catalysts on the Forex Calendar:
- Switzerland’s quarterly GDP at 6:45 am GMT
- Spain’s unemployment rate change at 8:00 am GMT
- Italy’s unemployment rate at 9:00 am GMT
- BOE’s monetary policy report hearings at 9:30 am GMT
- U.K.’s construction PMI at 9:30 am GMT
- Euro Zone’s flash CPI estimate and PPI at 10:00 am GMT
- Euro Zone’s unemployment rate at 10:00 am GMT
What to Watch: GBP/USD
In a few hours key Bank of England (BOE) members will testify before the Parliament’s Treasury Committee.Aside from inflation, monetary policymakers are expected to be asked about the impact of Coronavirus and Brexit on their economic outlook. And, given the RBA’s aggressive move earlier today, we could hear hints of future action and maybe a bit of premature optimism from the BOE team.
If today’s testimonies inspire risk-taking among pound bulls, then we could see GBP/USD break above the descending triangle on the 1-hour time frame and retest previous areas of interest like 1.2870, 1.2900, or 1.2940.
But if Governor Carney and his team play the waiting game and refuse to hint of some kind of stimulus down the road, then GBP/USD could slide back down to its February lows or even drop below 1.2600.