Asian session trading was pretty chill with a lot of traders out on long Easter weekends.
With no major catalysts in sight, will we see an extension of yesterday’s major themes?
Here’s a setup that I’ll be looking at in the next couple of hours.
Fresh Market Headlines & Economic Data:
- Mnuchin, Kudlow say U.S. economy could open in May, defying experts
- Japan’s producer prices decelerate further in March
- China factory gate deflation deepens as coronavirus paralyses global economy
- Chinese inflation slows as virus hurts demand and oil slumps
- Dollar heads for weekly loss on Fed move, easing virus fears
- Saudi, Russia outline record oil cut under U.S. pressure as demand crashes
Upcoming Potential Catalysts on the Economic Calendar:
- U.K. and Swiss markets out on Good Friday holiday
- France’s industrial production at 6:45 am GMT
- U.S. CPI reports at 12:30 pm GMT
- U.K.’s CB leading index at 1:30 pm GMT
- G20 meetings scheduled today
What to Watch: GBP/USD
While China’s CPI and PPI reports caused a few intraday wiggles among the comdolls, it was yesterday’s themes that dictated the few moves that we saw during the Asian session.
Specifically, the dollar continued to lose pips against most of its major counterparts.
See, the Fed’s surprise stimulus announcements got the traders taking risks despite a bigger-than-expected weekly initial jobless read in the U.S.
The U.K. and Swiss markets are out on Good Friday celebrations today so it’s likely that we’ll see an extension of the anti-dollar theme.
GBP/USD is trading around the 1.2450 levels that had served as resistance at least twice since late March.
If we see a continuation of the anti-dollar theme, then we could see a break above the range that would take the pair to the 1.2600 previous area of interest.
If the pound loses its shine, however, or if the dollar recovers before the Easter weekend, then we could see the 1-hour range resistance hold and GBP/USD could drop back to the 1.2200 levels.
Cable’s daily ATR is at around 250 pips, so a move to either direction is still possible. Make sure you know what time frame of GBP/USD volatility you want to trade so you’ll have better clues on where you’ll place your entry and stop losses!