It looks like the dollar is paring its post-NFP losses!
Or is this just a quick pullback ahead of a bigger selloff? Here’s what I’m seeing on GBP/USD.
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:
Australia’s ANZ job advertisements picked up by 0.4% m/m in July vs. earlier 2.7% slump (downgraded from initially reported 2.5% drop)
Japanese leading indicators dipped from 109.2% to 108.9% in June as expected, suggesting weaker economic activity
Swiss jobless rate ticked higher from 2.0% to 2.1% in July vs. projected 2.0% reading
German industrial production slowed by 1.5% m/m in July vs. estimated 0.4% decline and previous 0.1% dip
U.K. house prices fell 0.3% m/m in July vs. expected flat reading and earlier 0.1% dip, according to Halifax
Price Action News
After a sharp selloff on Friday’s NFP miss, the dollar slowly crawled higher early this week in an attempt to recoup some losses.
It managed to pull significantly higher against the franc and Loonie, as Canada’s jobs report also fell short, but barely made any progress against the rest of the comdolls and the European currencies.
With that, major FX pairs are still looking mixed ahead of the week’s potential inflation bombshells, as these would likely have a huge impact on global borrowing costs and recession fears.
Upcoming Potential Catalysts on the Forex Economic Calendar:
FOMC member Harker’s speech at 12:15 pm GMT
FOMC member Bowman’s speech at 12:30 pm GMT
BOE MPC member Pill’s speech at 4:00 pm GMT
Japanese average cash earnings and household spending at 11:30 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
GBP/USD: 15-min
With no top-tier catalysts on today’s docket, dollar traders might be extra sensitive to central bank rhetoric from FOMC members.
In particular, policymakers Harker and Bowman are scheduled to give testimonies and possibly share their thoughts on the latest NFP report. Recall that Fed head Powell kept the door open for a September hike, citing that they’ll look closely into the inflation and jobs reports coming up first.
Indications that Fed officials are leaning towards pausing again in their next decision could mean more downside for the Greenback, possibly sending GBP/USD further north.
The pair is currently retreating to the Fib levels close to a broken descending trend line, which might hold as support.
The 61.8% level seems closest to the area of interest and is in line with S1 (1.2680), so buyers might be keen on defending this floor. If so, Cable could resume the climb to the swing high that coincides with R1 (1.2790).
A break below the Fibs, on the other hand, could set off a drop to the next support zone at S2 (1.2630) near the swing low and the previous week lows.
