September 23, 2021

Daily U.S. Session Watchlist: GBP/USD

 Where will Cable be after the BOE?

This pair is closing in on a key support area, and I’m looking to catch a bounce to nearby resistance levels.

Before moving on, ICYMI, today’s Asia-London session watchlist checked out the selloff on EUR/USD after the FOMC decision. 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:

Asian shares bounce but stay on edge with Evergrande concerns

Evergrande chairman attempts to reassure investors on bond coupon payment

FOMC signals tapering coming soon, rate hike sometime next year

Fed to release paper on central bank digital currency

Fitch cut Chinese GDP forecast from 8.1% to 8.4%

Brazil’s central bank hiked interest rates, hints at one more next month

French flash manufacturing PMI down from 57.5 to 55.2 vs. 57.1 forecast

French flash services PMI down from 56.3 to 56.0 vs. 56.1 forecast

German flash manufacturing PMI down from 62.6 to 58.5

German flash services PMI slipped from 60.8 to 56.0

SNB kept rates unchanged at -0.75% as expected

U.K. flash manufacturing PMI down from 60.3 to 58.3

U.K. flash services PMI down from 55.0 to 54.6

Upcoming Potential Catalysts on the Economic Calendar:

BOE monetary policy decision, MPC minutes at 11:00 am GMT

Canadian retail sales at 12:30 pm GMT

U.S. Markit flash manufacturing and services PMIs at 1:45 pm GMT

Eurozone consumer confidence at 2:00 pm GMT

U.S. CB leading index at 2:00 pm GMT

U.S. natural gas storage at 2:30 pm GMT

New Zealand trade balance at 10:45 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

Who’s ready to trade the BOE decision?

I’m keeping close tabs on this descending triangle support on Cable, as the pair might be in for a big move during the central bank announcement.

No actual monetary policy changes are expected for the time being, but I’m sure pound traders are keeping their ears peeled for any shift in tone.

Keep in mind that a lone wolf voted to reduce total asset purchases in their earlier decision, so more hawkish votes this time might bring strong bullish vibes for Cable.

After all, U.K. inflation has been heating up over the past months, prompting policymakers to consider tightening monetary policy sooner.

Meanwhile, the Greenback enjoyed some support from the FOMC announcement on starting their own taper before the year ends. The dot plot forecast of rate changes also signaled a likely hike around mid-2022.

If support holds, Cable could recover to the triangle resistance at 1.3800 or at least until the nearby upside barriers around the 1.3700-1.3750 area of interest.

Technical indications are looking mixed, though, as the 100 SMA is below the 200 SMA but Stochastic is turning higher.

In any case, make sure you practice proper risk management when trading the news