There aren’t a lot of closely-watched reports on tap but the major dollar pairs are seeing interesting retracements.

Will GBP/USD extend its upswing today?

Before moving on, ICYMI, today’s Daily Asia-London Session Watchlist looked at a buying opportunity on AUD/JPY ahead of Australia’s mid-tier releases. Be sure to check that out to see if there is still a potential play!

And now for the headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

  • New Zealand food prices jump 1.1% on month in April
  • Shortage of U.K. homes for sale pushes house prices up further as fears mount over Government proposal to ease planning laws for new-builds
  • Asia shares spooked by U.S. inflation scare, hope for Fed calm
  • Australia, NZ dollars hit one-week low on U.S. rate hike risk
  • Gold up on hopes for continued low rates, firm yields cap gains
  • As much as $365 billion wiped off cryptocurrency market after Tesla stops car purchases with bitcoin
  • European stocks resume slide on rising inflation worries

Upcoming Potential Catalysts on the Economic Calendar:

  • Swiss, French, and German banks out on holiday
  • U.S. initial jobless claims at 12:30 pm GMT
  • U.S PPI report at 12:30 pm GMT
  • BOC Governor Macklem to talk in an online event at 3:00 pm GMT

What to Watch: GBP/USD

GBP/USD 1-hour Forex Chart

GBP/USD 1-hour Forex Chart

Uncle Sam surprised the markets yesterday when it printed much faster-than-expected consumer price increases in April.

Not only does this increase the pressure on the Fed to take back some of its easy monetary policies, but rising prices also put the economy in danger of slowing down if high inflation is not accompanied by higher wages or more job creation.

Concerns over the world’s largest economy, coupled with profit-taking and risk-aversion from the conflict between Israel and Palestine, dragged GBP/USD lower this week.

But how long can pound bears keep their momentum? It looks like the bulls are holding the 1.4060 area near a 38.2% Fib retracement and the 100 SMA on the 1-hour time frame.

If today’s U.S. initial jobless claims hint at more weaknesses in Uncle Sam’s job creation, then we could see more risk aversion that would drag high-yielding currencies like the pound lower. Watch out for a trip to the big 1.4000 near a previous resistance and the lower Fib levels.

If high-beta currencies get a mid-week makeover, though, or if today’s mid-tier releases encourage risk-taking, then GBP/USD could hold its 38.2% Fib support and head for its May highs.