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The pound was under pressure during the London session off of a fresh catalyst. Do sellers still have legs for the U.S. session?

Intermarket Snapshot

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Fresh Market Headlines & Economic data:

Upcoming Potential Catalysts on the Forex Calendar:

  • Bank of England Governor Carney testifies to House of Lords at  at 3:35 pm GMT
  • Fed’s Barkin speaks in Richmond at 4:30 pm GMT
  • U.S. Federal Budget Balance at 7:00 pm GMT
  • RBA’s Lowe speaks in Sydney  at 10:10 pm GMT
  • Australia quarterly GDP at 12:30 am GMT (Mar. 6)

What to Watch: GBP/USD

GBP/USD 1-Hour Forex Chart
GBP/USD 1-Hour Forex Chart

Most of the Tuesday session was pretty quiet across the world of major currencies, but fortunately for traders we got some action in the British pound after a fresh Brexit-related headline.

Sterling fell during the morning London session after Labour Party’s John McDonnell was quoted on saying that few Labour lawmakers would support May’s Brexit deal when it comes time to vote before or on March 12. GBP/USD took a roughly 80 pip dive on the news before bouncing at the major psychological level. The question now is, does the trend lower in GBP/USD still have legs for the rest of the session? The answer is…maybe.

The U.S. just posted positive ISM services and new home sales data that could give steam to USD bulls, and we’ve got Bank of England Governor March Carney testifying to the House Lords Economic Affairs Committee later today to possibly spark another round of volatility for Sterling pairs.

For the bears, the trend is your friend right now, but given that the pair has already dropped 100 pips peak-to-trough in today’s session, waiting for a bounce higher to Asia session support around 1.3150 and reversal patterns form is something to watch out for today. A break below the 1.3100 level should also be considered as it once was a broken resistance-turned-support area that could draw in sellers once again if Carney sounds dovish today.

For the bulls, it’s a tough call to make given the trend lower, but if the pair can break above the the 1.3200 handle on hawkish Carney commentary, that might draw in buyers later in the week. Or if the pair does continue holds at the broken resistance-turned-support area around 1.3100, that might be a play to take if you can keep your stops tight given Carney’s testimony ahead.