Cable has been enjoying a nice and steady uptrend lately.
Will the currency pair see some retracement in the next few hours?
Before we talk about GBP/USD’s opportunities, check out the top headlines that rocked the markets in the late U.S. and early Asian sessions:
- Fed’s Evans says 3% inflation wouldn’t be bad
- UK shop prices slide again in December: BRC
- China’s services sector expands at a slower pace – Caixin PMI
- Oil hits 11-month high after Saudi Arabia pledges voluntary output cut
- Trump bars U.S. transactions with eight Chinese apps including Alipay
- Australia services PMI climbs to 57.0 in December – Markit
- Bitcoin breaks above $35,000 to touch new high
- Stocks fall as investors brace for possible ‘blue sweep’ in Georgia
- Australia, NZ dollars hold gains as global factories keep humming
Upcoming Potential Catalysts on the Economic Calendar:
- 7:45 am GMT France’s preliminary services CPI
- 8:15 am GMT Spain’s preliminary services CPI
- 8:45 am GMT Italy’s preliminary services CPI
- 8:50 am GMT France’s final services CPI
- 9:00 am GMT Eurozone’s final services CPI
- 9:40 am GMT U.K.’s final services CPI
- 1:15 pm GMT ADP report
What to Watch: GBP/USD
Unless you were too busy panicking about a possible Kim Kardashian-Kanye West split, you should know that U.K. PM Boris Johnson has just announced a third lockdown period for the country. Yikes!
GBP/USD ain’t too bothered though, as it has already gained at least half of its post-announcement losses since then.
All eyes are currently on Georgia’s Senate runoffs, which could lead to Democrats getting low key control of policymaking, at least until the mid-term elections.The U.S. dollar has gained some fans when traders start worrying about having higher taxes in the U.S. as well as the drama expected from Biden’s confirmation in Congress today.
The pound could take bigger hits than its fellow high-yielding comdolls because the U.K.’s lockdowns may not have been fully priced in. This could drag GBP/USD to the 1.3650 area near the 100 and 200 SMAs in case of risk aversion.
More risk-taking, on the other hand, could see Cable pop to its January highs and maybe even break above its ascending channel on the 4-hour time frame.