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In a few hours, the U.S. will publish its June ADP report.

In the forex market, will traders use the event to drag GBP/USD to a key area of interest?

Before moving on, ICYMI, today’s Asia-London session watchlist looked at GBP/AUD’s bullish momentum ahead of data releases from Australia and the U.K. Be sure to check that out if it’s still a valid play!

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

Fresh Market Headlines & Economic Data:

Upcoming Potential Catalysts on the Economic Calendar:

  • Eurozone CPI flash estimate at 9:00 am GMT
  • Italy’s preliminary CPI at 9:00 am GMT
  • Outgoing U.K. MPC Member Andy Haldane to give a speech at 11:00 am GMT
  • FOMC member Bostic to give a speech at 12:00 pm GMT
  • U.S. ADP report at 12:15 pm GMT
  • Canada’s monthly GDP at 12:30 pm GMT
  • U.S. pending 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 a few pips away from the 1.3800 major psychological handle that has been serving as support and resistance since late March.

Will the 1.3800 area hold of the bears for another day today?

Markets see the U.S. ADP data clocking in at 450K, much weaker than the 978K figure we saw in May. If the report disappoints even the markets’ muted expectations, then we could see a bit of dollar weakness as traders anticipate a longer period of easy monetary policies from the Fed.

The pound isn’t without its weak spots, though. In fact, MarketMilk considers GBP/USD a “sell” on the shorter time frames!

Extended lockdown restrictions in the U.K. have dragged GBP/USD into a weeks-long downtrend. And why not? Today’s revised U.K. GDP and household savings numbers have hinted at how much restrictions can rain on the economy’s parade.

But things are looking up as U.K.’s new Health Minister Sajid Javid is showing signs that he’s really not a fan of lockdowns.

If more traders price in easing lockdown restrictions in the U.K., then it would be easier for traders to price in a weak dollar against the pound and for bulls to defend the 1.3800 support.