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Starting off the new week with a look at Cable, which has seen bullish support over the last month. Will that run continue with the help of U.K. unemployment right around the corner?

Intermarket Snapshot

Equity Markets Bond Yields Commodities & Crypto
DAX: 12215.03 +0.19%
FTSE: 7212.43 -0.96%
S&P 500: 2983.07 +0.15%
DJIA: 26882.61 +0.32%
US 10-yr 1.628% +0.078
Bund 10-YR -0.574% +0.062
UK 10-YR: 0.601% +0.095
JPN 10-YR: -0.267% +0.021
Oil: 57.62 +1.95%
Gold: 1514.80 -0.05%
Bitcoin: 10347.96 -0.66%
Etherium: 182.83 +0.51%

Fresh Market Headlines & Economic Data:

Upcoming Potential Catalysts on the Forex Calendar:

  • U.S. Consumer credit at 8:00 pm GMT
  • Japan M2 money supply at 12:50 am GMT (Sept. 10)
  • Australia Business confidence at 2:30 am GMT (Sept. 10)
  • China PPI & CPI at 2:30 am GMT (Sept. 10)
  • Japan Machine tool orders at 7:00 am GMT (Sept. 10)
  • French Industrial production at 7:45 am GMT (Sept. 10)
  • Italian Industrial production at 9:00 am GMT (Sept. 10)
  • U.K. Unemployment data at 9:30 am GMT (Sept. 10)
  • Canada Housing starts & Building permits at 1:30 pm GMT (Sept. 10)

What to Watch: GBP/USD

GBP/USD 1-Hour Forex Chart
GBP/USD 1-Hour Forex Chart

As mentioned in the intro, bulls have pretty much been in control over the last few weeks as positive global risk sentiment and weak U.S. economic updates have lead to a bearish USD bias, while Sterling bulls have benefited from efforts to stop a no-deal Brexit by UK Parliament. The positive global risk sentiment is likely to continue as we see more positive signs from the U.S.-China trade story to help support this trend higher, but the market is about to retest a consolidation area between 1.2400 – 1.2500, which brings on the question of “where to next?”

Well for the next session or two, the upcoming U.K. unemployment data will likely be the market driver, and based on recent U.K. manufacturing PMI and services PMI data, the odds are more in favor of signs of weakness from the employment sector.

If you’ve been a bear on GBP/USD as most of the market has been given the longer-term trend lower, then a weak update to U.K. data makes that previous consolidation a potential jump in area to play the longer-term trend lower. And with the recent swing lows around 400 pips from the current market levels, the risk-to-reward is very favorable if using the daily ATR of around 100 pips as a stop exit guide.

If you’re a bull on GBP/USD, a surprise positive update to U.K. data could take this short-term trend higher. A break above 1.2400 and retest/hold at that area may draw in more buyers for a short-term play on recent Sterling strength and positive global risk sentiment. And with the next resistance area around 1.2550, then the potential R:R is attractive for a short-term play if, once again, using the daily ATR as an exit guide for your stop.