Daily Forex News and Watchlist: GBP/USD


The U.K. has printed its jobs data and the U.S. CPI is up!

We’re taking another look at GBP/USD as the pair trades near a breakout area.

Before moving on, ICYMI, yesterday’s watchlist looked at GBP/USD’s triangle consolidation ahead of the U.K. jobs data 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:

BTC/USD hits $50,000 for the first time since late 2021

U.S. government budget deficit narrowed from $-129.4B to $21.9B in January as tax refunds fell and receipts hit a January record

In a discussion on Monday, voting FOMC member Thomas Barkin said “There’s a real risk that there will be continued inflationary pressure,” and that “declaring victory at this point seems pretty bold

Westpac: Australia’s consumer sentiment index jumped from -1.3% to a 20-month high of 6.2% in February thanks to softer inflation and peak interest rate bets for the RBA

Japan’s producer price index in January: 0.2% m/m (0.1% expected, 0.2% previous)

NAB: A pullback in the services sectors led to Australia’s business conditions easing 2pts to +6, while manufacturing and construction helped push business confidence 1pt higher in January

RBNZ’s expectations survey showed the one-year-ahead inflation expectations dipping from 3.60% to 3.22% while the two-year-ahead rate fell from 2.76% to 2.50% in Q1 2024

Japan’s preliminary machine tool orders for January: -14.1% y/y (-9.6% previous), marked the 13th consecutive period of declining orders due to lower domestic and foreign demand

U.K.’s January jobs data favored BOE rate cut delays: Claimant counts rose from 5.5K to 14.1K; Unemployment rate dropped from 4.2% to 3.8%; three-month average earnings slowed down from 6.7% to 5.8%

Switzerland’s inflation accelerated from 0.0% m/m to 0.2% m/m (0.6% expected) in January led by rising electricity, hotel, and car insurance prices

Price Action News

Overlay of CHF vs. Major Currencies

Overlay of CHF vs. Major Currencies Chart by TradingView

There were decent moves among the major currencies during the Asian and early European sessions, but CHF saw the most volatility following Switzerland’s CPI release.

Switzerland’s inflation came in at 0.2% m/m in January, which is slower than the expected 0.6% uptick but still represents an acceleration from December’s 0.0% consumer price growth. It also translated to an annual CPI of 1.3% y/y compared to the expected 1.7% y/y rate.

Slower-than-expected inflation opens the possibility of an SNB interest rate cut in the foreseeable future. No wonder CHF fell across the board!

Upcoming Potential Catalysts on the Economic Calendar:

Euro Area ZEW economic sentiment at 10:00 am GMT
German ZEW economic sentiment at 10:00 am GMT
U.S. CPI reports at 1:30 pm GMT
New Zealand’s food price index at 9:45 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 Forex

GBP/USD 15-min Forex Chart by TradingView

Yesterday we checked out GBP/USD’s trend line support for a possible downside breakout opportunity.

Now that we’re a few more candlesticks older and wiser, we can revisit GBP/USD possibly breaking above a range in the 15-minute time frame.

As mentioned above, the U.K.’s latest labour market data supported the BOE delaying its first interest rate cuts. Not surprisingly, GBP shot up including against USD.

GBP/USD is now trading closer to the 1.2650 psychological level that’s close to this week’s highs and the R1 (1.2650) Pivot Point line in the chart. That’s after pulling back to the 1.2640 area!

Let’s see if today’s U.S. CPI report can encourage consistent trading above GBP/USD’s February highs.

If Uncle Sam’s inflation decelerates further as the markets are expecting, then the Fed will have more reason to push forward its first interest rate cut.

The U.S. dollar may draw in market bears and GBP bulls would have an opportunity to fire up their bullish momentum. GBP/USD could get enough fuel to hit the R1 Pivot Point line if not the R2 (1.2680) Pivot Point level.

We’re not discounting a buy-the-rumor, sell-the-news scenario though. If today’s U.S. CPI release encourages USD demand or profit-taking from the London session’s GBP-buying, then GBP/USD could trade back inside its range.


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