Is it me or is GBP/USD knocking on its weekly highs?

I’m checking out a possible breakout that would mean new May highs for the pound!

But first, check out the headlines that rocked the markets in the last trading sessions:

Fresh Market Headlines & Economic Data:

  • U.S. weekly jobless claims decline further; mid-Atlantic factory activity cools
  • BOC warns of rising risks from mortgage debt and a hot housing market
  • Australia manufacturing PMI improves to 59.9 in May – Markit
  • Australia retailers boast solid April sales – preliminary data
  • Japan’s consumer prices extend falls as pandemic hit to demand persists
  • Japan approves Moderna, AstraZeneca vaccines
  • UK consumers regain pre-COVID confidence level – GfK
  • UK PMI business survey hits record high as lockdowns ease, prices jump too
  • US crypto investors to report transactions over $10k to the IRS
  • Hong Kong to restrict crypto exchanges to professional investors
  • Bitcoin slips below $40,000 as recovery fades
  • European stocks flat as Richemont jump offsets UK slide

Upcoming Potential Catalysts on the Economic Calendar:

  • ECB President Lagarde to give a speech in Lisbon
  • Canada’s retail sales at 12:30 pm GMT
  • U.S. manufacturing and services PMIs at 1:45 pm GMT
  • Eurozone’s consumer confidence at 2:00 pm GMT
  • U.S. existing home sales at 2:00 pm GMT

What to Watch: GBP/USD

GBP/USD 1-hour Forex Chart

GBP/USD 1-hour Forex Chart

Cable is trading just above the 1.4200 major psychological handle that had held as resistance earlier this week.

Can the bears hold the level for another day?

Data printed earlier today showed the U.K.’s consumers AND businesses getting more confident in May as businesses reopen and the economy responds to a global economic recovery. The May GfK Consumer Confidence Index matched its March 2020 levels; the U.K. composite PMI hit its record highs in May, and retail sales soared by 9.2% in April.

Meanwhile, the Fed’s non-event earlier this week eased tapering concerns and gave market bulls the courage to buy high-yielding bets like the pound.

A clear break above 1.4200 could take Cable to the 1.4240 highs seen in February. Heck, it could even pop up to the 1.4330 highs that it made in April 2018!

If the bears manage to hold the 1.4200 zone, however, then you can also ride the bearish momentum all the way to the trend line support closer to the 100 and 200 SMAs.