The British pound is going strong against the U.S. dollar despite the Fed’s hawkish meeting minutes!
Will this translate to GBP/USD extending its short-term uptrend?
Before moving on, ICYMI, yesterday’s watchlist checked out CAD/JPY’s short-term uptrend ahead of Canada’s CPI release. Be sure to check out if it’s still a good play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
Canada Housing Starts for July fell -10% y/y to 255.0k (243.0k forecast; 283.5k previous)
Canada Wholesales trade for June: 2.8% m/m (-4.4% m/m forecast; 2.9% m/m previous)
U.S. Building Permits for July: 0.1% m/m (1.1% m/m forecast; -3.7% previous); Housing Starts were up 3.9% m/m (1.7% m/m forecast; -11.7% m/m previous)
U.S. Industrial Production for July: 1.0% m/m (0.2% m/m forecast; -0.8% m/m previous)
EIA crude oil inventory change for week ending Aug. 11: -6M to 439.7M barrels vs. +5.85M change previous week
FOMC meeting minutes: “Most participants continued to see significant upside risks to inflation, which could require further tightening of monetary policy” but “a couple” of participants pushed to leave rates unchanged in July.
RBNZ Gov. Orr said mild inflation is the “bare minimum we need to see” before considering rate cuts. He added that “We don’t feel a rush to be changing rates anytime soon”
New Zealand’s quarterly input prices slipped by 0.2% (vs. 0.4% expected, 0.0% previous); output prices gained 0.2% (vs. 0.8% expected, 0.2% previous)
Japan’s exports fell by 0.3% y/y in July (vs. 0.8% expected, 1.5% previous), its first decline since February 2021. Imports also slid by 13.5% y/y the steepest decline since September 2020.
Japan’s core machinery orders rose by 0.2% m/m in June (vs. 3.6% expected, -7.6% in May
Australia lost a net of 14,600 jobs in July (vs. +14,600 expected, +31,600 previous); full-time jobs dropped by 24,200 while part-time jobs gained by 9,600
Australia’s unemployment rate edged up from 3.5% to 3.7% in July; labor force participation rate dipped from 66.8% to 66.7%
Price Action News
With not a lot of fresh catalysts in the market, Asian session traders were able to focus on Australia’s labor market data.
Unfortunately, the numbers came in weak. The economy lost jobs in July, enough to push the unemployment rate from 3.5% to 3.7% for the month.
It also didn’t help risk assets like AUD that China’s growth concerns continue to limit risk-taking in the markets.
AUD, which was already hurting from hawkish Fed expectations from the previous session, dropped to new intraweek lows against its counterparts before the currency saw some pullback.
Upcoming Potential Catalysts on the Forex Economic Calendar:
U.S. initial jobless claims at 12:30 pm GMT
Philly Fed manufacturing index at 12:30 pm GMT
U.K. GfK consumer confidence at 11:01 pm GMT
Japan’s national core CPI 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
If you’ve been busy buying the U.S. dollar against other major currencies, then you probably would’ve noticed that GBP traders missed the memo on all the USD-buying.
GBP/USD is maintaining its uptrend in the 15-minute time frame as it remains inside an ascending channel pattern the chart.
Let’s see if today’s lower-tier U.S. reports can extend GBP/USD’s uptrend.
Keep in mind that USD is gaining ground because Fed members seem comfortable keeping their interest rates higher for longer.
If traders decide to second guess the Fed’s hawkishness, then GBP could get more attention especially after the U.K. printed better-than-expected data earlier this week.
Look out for sustained trading above the Pivot Point level, which could support GBP/USD’s next leg all the way to its previous highs near 1.2775 or 1.2780.
