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The BOE is making policy announcements today while Uncle Sam is set to print a closely watched weekly jobless claims data. Will today’s events make or break GBP/USD’s range?

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:

  • Germany’s GfK consumer climate at 7:00 am GMT
  • U.K.’s retail sales at 7:00 am GMT
  • ECB’s economic bulletin at 9:00 am GMT
  • BOE’s monetary policy announcement at 12:00 pm GMT
  • U.S. unemployment claims at 12:30 pm GMT
  • U.S. final GDP reading at 12:30 pm GMT

What to Watch: GBP/USD

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

The dollar had a mixed session earlier today. Anticipation of the approval of a $2 trillion stimulus bill in the U.S. failed to energize the comdolls as USD gained against AUD, CAD, and NZD. The dollar lost pips against EUR, CHF, and JPY, however.

Meanwhile, GBP/USD traded on a tight range. The pair is now trading just under a range resistance that happens to line up with the 200 SMA on the 1-hour chart.

After cutting its rates to an all-time low of 0.10% and with a newly-minted Governor, markets aren’t expecting any new measures from the Bank of England (BOE) this week beyond some form of forward guidance.

Meanwhile, traders are watching Uncle Sam’s weekly jobless claims data. Word around is that it could reach as high as 4 MILLION after the first round of COVID-19 related layoffs have been recorded.

If the jobless claims print much higher than the markets’ already high expectations, then traders could question the effectiveness of the latest stimulus measures and inspire a bit of risk aversion across the board.

GBP/USD could bounce from its range resistance and target its previous lows near 1.1450.

If the BOE inspires confidence in the markets, however, or if Uncle Sam’s results gets traders to take risks, then we could see Cable pop firmly above the 200 SMA and maybe head towards areas of interest like 1.2010 or 1.2125.