The majors are in for a busy day with U.K.’s CPI, Biden’s inauguration, and BOC’s statement due in a few hours!
Today I’m looking at GBP/USD for a short trading opportunity.
Before I show you the chart, though, lemme list down the top headlines that rocked the markets during the late U.S. and early Asian sessions:
- Canada’s wholesale sales hit record high in November, manufacturing sales down
- McConnell: Trump ‘provoked’ Capitol siege, mob was fed lies
- Germany extends lockdown to Feb. 14
- Italy’s Conte survives close Senate vote, vows to forge ahead
- Wall Street closes higher as Yellen backs more stimulus
- Westpac consumer confidence reveals border restrictions denting economic outlook
- China’s foreign direct investment up 6.2% to record high in 2020
- Asian shares hit a record high after Yellen calls for big spending
Upcoming Potential Catalysts on the Economic Calendar:
- Germany’s PPI at 7:00 am GMT
- U.K. inflation reports at 7:00 am GMT
- U.K. house price index at 9:30 am GMT
- Canada’s CPI at 1:30 pm GMT
- BOC’s policy announcement at 3:00 pm GMT
What to Watch: GBP/USD
Asian equities may have gotten a boost from Yellen’s “act big” plans for fiscal stimulus, but Asian session forex traders have started to take some profits.
That doesn’t mean that the risk rally is over, though! The U.K. is expected to print stronger inflation numbers in December, which would be a small relief given the latest lockdown measures in the country.If London session traders take the CPI release as a catalyst for more risk-taking, then we could see GBP/USD jump to its 1.3700 range resistance on the 1-hour time frame. Keep close tabs on the strength of any upswing, as it could also lead to an upside breakout.
If today’s CPI release disappoints, however, or if early London session traders choose to take some more profits ahead of Biden’s inauguration and BOC’s statement, then Cable could dip back down to the mid-range levels near 1.3600 or even had towards the 1.3450 range support.