Cable has fallen far enough to revisit a short-term support zone after a key U.K. data release.
Can GBP/USD find some buyers around the area?
Let’s take a look at the 15-minute chart to identify potential buy and/or sell opportunities.
Before moving on, ICYMI, yesterday’s watchlist looked at GBP/JPY’s short-term downtrend ahead of the U.K.’s jobs 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:
BOE member Catherine Mann said on Monday she’d likely support further rate hikes to fight inflation
Overseas visitor arrivals into New Zealand continued to rebound a year on from fully opening the border, with short-term visitors up from 11.3% to 19.8% in July
Chinese property developer giant Country Garden secured approval from its creditors to extend repayments on six onshore bonds by three years
A Westpac report showed Australian consumer confidence slipping by 1.5% to 79.7 in September while business conditions were up 2 points to 13 in August.
NAB: Business confidence in Australia improved from 1 to 2 in August but was still weighed by “deep negatives in the retail sector”
Germany’s wholesale prices were up by 0.2% (vs. -0.1% expected, -0.2% previous) in August; selling prices were down by 2.7% y/y
U.K.’s unemployment rate was higher from 4.2% to 4.3% in August; Jobless claimants are lower from 29K to 0.9K; Average wage growth is still at 8.5% record high in July
Price Action News
A lack of fresh catalysts kept the British pound in ranges for most of the Asian session.
In fact, the currency didn’t see a volatility spike until the U.K. printed its labor market data. The report showed the economy seeing a higher unemployment rate, lower participation rate, lower jobless claimants, and more full-time workers.
But the report also showed wage growth sticking at a record high of 8.5% in the three months to July. The prospect of the BOE possibly needing further rate hikes amidst an already weak(ish) labor market weighed on GBP against its major counterparts.
U.S. NFIB small business index at 10:00 amG MT
New Zealand’s food price index at 10:45 pm GMT
Japan’s BSI manufacturing index at 11:50 pm GMT
Japan’s PPI at 11:50 pm GMT
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With not a lot of top-tier data releases scheduled during the U.S. session, traders may focus on the U.K.’s jobs numbers and extend GBP’s intraday downtrend.
I’m looking at GBP/USD as it’s currently hitting the S1 (1.2470) of the 15-minute Pivot Points.
Think Cable still has room to fall?
GBP/USD may hit the 1.2460 previous support zone in the next couple of trading sessions if the current anti-GBP sentiment continues.
But if we see a bit of profit-taking ahead of tomorrow’s U.K. GDP and U.S. CPI releases, then GBP/USD may revisit higher areas of interest like 1.2500 or 1.2510 before turning lower again.
What do you think? Will GBP/USD take a breather from its downswing and revisit 1.2500?
Or will the pair sooner revisit previous lows and make new weekly lows than see any sustained buying pressure?