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It’s PMI day for the European economies but I have a feeling that London traders will look to market sentiment for direction.

Are you also seeing a “breakout” on Cable’s chart?

Before you place any orders, make sure you know all about the major market headlines in the last few hours:

Major Forex Pairs Price Performance from MarketMilk
Major Forex Pairs Price Performance from MarketMilk

Upcoming Potential Catalysts on the Economic Calendar:

  • U.K.’s retail sales at 7:00 am GMT
  • France’s manufacturing and services PMIs at 8:15 am GMT
  • Germany’s manufacturing and services PMIs at 8:30 am GMT
  • Eurozone’s manufacturing and services PMIs at 9:00 am GMT
  • U.K.’s manufacturing and services PMIs at 9:30 am GMT
  • Canada’s retail sales at 1:30 pm GMT

What to Watch: GBP/USD

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

A few days ago we talked about Cable heading towards its 1.3700 range resistance on the 1-hour time frame.

Well, the bulls finally succeeded in breaking above the ceiling!

GBP/USD has since pulled back, though, as it’s now trading about 10 pips from the previous resistance.

Is this a break-and-retest thing we’re seeing? Pound bulls who think that the previous sessions’ risk aversion will translate to bargain hunting in the London and U.S. sessions can buy GBP/USD as soon as it makes new weekly highs.

But what if the profit-taking/risk aversion themes persist? See, the latest lockdown measures in the European region have already translated to lower consumer confidence in the Eurozone and in the U.K. It’s not reaching to say that we could also weaknesses in today’s PMI releases.

If risk aversion continues to drag on high-yielding bets like the pound, then GBP/USD could slide back inside its range and maybe hit the 1.3650 previous support levels near the SMAs.