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U.S. producer prices are up in a few hours!

Will today’s release remind traders that the Fed may raise rates in a few months?

Before moving on, ICYMI, today’s Asia-London session watchlist looked at EUR/CHF’s textbook range setup ahead of economic releases from the Eurozone. Be sure to check 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:

Japan’s inflation-adjusted wages slips for the first time in three months as inflation outpaces wage growth

Japan’s current account surplus falls 31% amid slow car exports

Australia’s new home sales climbed 11.1% in October amid a lift in consumer confidence following end of COVID-19 lockdowns in some states

Australia NAB business confidence jumps from 10 to 21 in Oct, conditions rose from 5 to 11 on rebound expectations

Early Christmas shopping and cinema trips boost UK consumer spending in Oct

Japan’s October service sector sentiment at highest in nearly 8 years as state-of-emergency measures eased

German exports fall for second consecutive month in September

Upcoming Potential Catalysts on the Forex Economic Calendar:

Eurozone ZEW economic sentiment at 10:00 am GMT
Germany’s ZEW economic sentiment at 10:00 am GMT
ECB President Lagarde to give a speech on banking supervision
U.S. PPI reports at 1:30 pm GMT
Fed Chairman Powell to give a speech at 2:00 pm GMT

If you’re not familiar with the forex market’s main trading sessions, check out our Forex Market Hours tool.

What to Watch: GBP/USD

GBP/USD 1-hour Forex Chart
GBP/USD 1-hour Forex Chart

Cable started the month by breaking an uptrend and now it’s trading around the 1.3550 zone.

As you can see, the level lines up with the 50% Fib retracement of the last downswing, a support zone from October, the 100 SMA on the 1-hour chart, and a descending channel resistance on the 1-hour chart.

We’ve got a couple of events lined up today but traders will likely focus on the U.S. producer price increases.

It also doesn’t hurt the dollar’s spotlight that Fed Chairman Powell will participate in a virtual conference and may hint at the Fed’s tightening schedule.

Higher-than-expected prices will put more pressure on the Fed to raise its rates sooner rather than later.

If traders price in a hawkish Fed today, then at least some traders will remember that the Bank of England (BOE) recently surprised markets by NOT raising its rates. The difference between the Fed and BOE’s biases could drag GBP/USD below 1.3500 or even to November’s lows.

If today’s events extend the dollar’s losses, though, then Cable could finally break above its descending channel. The 200 SMA is the nearest target but I’m not discounting a trip to 1.3700 in the next few days if there’s enough momentum.