September 20, 2021

Daily U.S. Session Watchlist: GBP/USD

 Bounce or break?

I’m seeing a potential short-term reversal pattern on Cable, but this could shape up to be a range play also.

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

Fresh Market Headlines & Economic Data:

BusinessNZ manufacturing index down from 62.2 to 40.1 in August

China filed an application to join CPTPP trade pact

Asian shares stabilize but China growth fears still linger

U.K. retail sales slumped 0.9% in August vs. projected 0.5% rebound

U.K. consumer inflation expectations up from 2.4% to 2.7%

Eurozone yields advance as ECB projects hitting inflation goal by 2025

Upcoming Potential Catalysts on the Economic Calendar:

U.S. preliminary UoM consumer sentiment index 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

Is GBP/USD in for a reversal from its climb?

The pair made a couple of failed attempts to move past the 1.3900 handle and is now testing support around the 1.3750-1.3800 region.

A bounce could take it back up to the recent highs while a break lower could spur a selloff that’s the same size as the double top chart pattern.

Technical indicators are suggesting that pound bulls have enough energy left in ’em, as the 100 SMA is above the 200 SMA while Stochastic is heading up.

The dollar’s next moves might depend on the results of the UoM consumer sentiment survey, as a pickup in optimism could spell positive prospects for spending.

Recall that Uncle Sam reported a surprise jump in both headline and core retail sales for August versus estimated declines, even after jobs data for the same month printed grim results.

Meanwhile, the U.K. just printed downbeat retail sales data for August, as consumer spending slumped 0.9%. The previous month’s reading was also downgraded from a 2.5% to 2.8% decline.