Breakout alert!
Cable looks prime for a big move, as market players brace themselves for this week’s events.
Before moving on, ICYMI, I’ve listed the potential economic catalysts that you need to watch out for this week. Check them out before you place your first trades today!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
Yellen confident that Congress will pass minimum corporate tax, raise debt ceiling
Goldman Sachs lowered growth forecasts for U.S. economy this year and 2022
Asian market bounce as Chinese shares recover
Bondholders still wary about Evergrande coupon payment deadline
Japanese preliminary machine tool orders slow to 71.9% y/y
Chinese yuan rises to monthly high on hopes of improving U.S. ties
Italian industrial production down 0.2% vs. projected 0.4% drop
Upcoming Potential Catalysts on the Economic Calendar:
U.S. FOMC member Evans’ speech at 10:00 pm GMT
U.K. BRC retail sales monitor at 11:00 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
There’s not much in the way of top-tier forex market releases today, so traders might either focus on sentiment or start placing bets ahead of this week’s catalysts.
The main events include the FOMC minutes, U.S. retail sales, and a few mid-tier reports from the United Kingdom.
Take note, though, that BOE officials have recently doubled down on their tightening calls, as prices pressures remain elevated.
This could be enough to spur an upside break from Cable’s rising wedge, especially if risk-on flows stay in play.
From a technical standpoint, the 100 SMA is above the 200 SMA to signal that the path of least resistance is to the upside. In addition, Stochastic has room to climb before reflecting exhaustion among buyers.
If a bullish break happens, GBP/USD could climb by at least the same height as the wedge or roughly 250 pips.
Similarly a break below the wedge support could be met by a drop of the same size, so keep your eyes peeled for any long green or red candles!
