With several Fed policymakers scheduled to speak today, I’m keeping my eyes peeled for a big dollar move.
Is Cable due for a bounce or a break from this short-term range?
Before moving on, ICYMI, today’s Daily Asia-London Session Watchlist looked at a possible trend opportunity on AUD/NZD based on government measures to curb New Zealand’s property price surge. Be sure to check that out to see if there is still a potential play!
Fresh Market Headlines & Economic Data:
- Major floods in Australia led thousands to be evacuated
- New Zealand credit card spending slumped 12.4% year-over-year
- BOJ core CPI printed 0.2% dip as expected
- Housing reforms announced by New Zealand gov’t to curb property price surge
- Japanese Ministry of Finance announced measures to support firms, workers
- ECB official Lane: Eurozone facing difficult quarter but central bank will do its part
Upcoming Potential Catalysts on the Economic Calendar:
- U.K. claimant count change and average earnings index at 7:00 am GMT
- U.K. CBI industrial order expectations at 11:00 am GMT
- BOE Governor Bailey’s testimony at 11:50 am GMT
- Fed head Powell’s speech at 2:00 pm GMT
- FOMC members Bostic, Brainard and Williams to give testimonies starting 2:10 pm GMT
What to Watch: GBP/USD
Don’t look now, but GBP/USD is sitting right at the very bottom of its range!
Price has formed lower highs recently, suggesting that sellers might be building up strength to break below the floor. If that happens, the pair could slide by the same height as the rectangle pattern, which spans roughly 175 pips.If buyers keep defending support, Cable could recover to the range resistance soon. Stochastic is inching close to the oversold region, after all, so sellers might be feeling exhausted at this point.
The upcoming release of U.K. employment data, namely the claimant count change and average earnings index, might be enough to spur a big move.
BOE Governor Bailey’s testimony could also be worth watching, and it’s important to keep in mind that his recent commentary leaned towards the optimistic side.
In case these economic events aren’t enough to bust a move for GBP/USD, you might want to keep tabs on Fed policymakers’ speeches, starting with Chairperson Powell himself.Recall that Powell assured that there’s no need to adjust monetary policy for the time being, so he might stick to this spiel during his testimony along with Treasury Secretary Yellen today.
If the rest of the FOMC members echo the same sentiment, the dollar might be in for some weakness as bulls could be disappointed about the lack of tightening hints.
