Daily Forex News and Watchlist: GBP/USD

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Not-so-hot U.K. data releases got traders selling the British pound today.

Will GBP/USD find support in the next trading sessions?

Before moving on, ICYMI, yesterday’s watchlist looked at EUR/USD’s retracement levels ahead of the U.S. ADP and ISM services PMI releases. 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:

U.S. Producer Prices Index change for September: 0.5% m/m (0.4% m/m forecast; 0.7% m/m previous); Core PPI at 0.3% m/m (0.2% m/m forecast/previous)

FOMC Meeting Minutes: will “proceed carefully” and sees risks with both overtightening or undertightening

FOMC member Christopher Waller says “The financial markets are tightening up” and they are going to do some of the work for us”

New Zealand’s food price inflation fell by 0.4% m/m and 8.0% y/y in September and marked its lowest annual growth since July 2022

The U.K.’s RICS house price balance measuring the difference between the percentage of surveyors seeing rises and falls in house prices dropped to -69 in September after August’s -68 reading

Japan’s core machinery orders fell for a second straight month in August, down by 0.5% (vs. 0.7% expected, -1.1% previous)

Japan’s producer prices rose by another 2.0% y/y in September (vs. 2.4% expected, 3.3% previous); and showed slower growth for the ninth month in a row

BOJ Board Member Asahi Noguchi: “The biggest focus now is whether this (wage growth) momentum will be maintained or not

China’s sovereign wealth fund raised its stake in ‘Big Four’ banks for the first time since 2015 and encouraged speculations that the government will step in to stem stock market losses

U.K.’s monthly GDP came in at 0.2% in August as expected; services sector output offset weaknesses in production

U.K.’s industrial production dropped by 0.7% in August (vs. -0.2% expected, -1.1% previous)

U.K.’s manufacturing production slipped by 0.8% (vs. -0.3% expected, -1.2% previous)

Price Action News

Overlay of NZD Pairs 15-min

Overlay of NZD Pairs 15-min

It was a range-y kind of day for most of the major currencies as traders waited for the U.S. CPI report release.

The New Zealand dollar danced to its own beat, however, as it dropped against its major counterparts despite talks of China’s sovereign wealth fund buying shares of China’s largest banks bumped risk-taking a bit in the last trading sessions.

It’s a pretty close fight but, as of writing, NZD is having the worst day against CHF, CAD, and JPY and isn’t too in the negative against fellow “risky” assets like AUD and GBP.

Upcoming Potential Catalysts on the Economic Calendar:

U.S. CPI reports at 12:30 pm GMT
U.S. initial jobless claims at 12:30 pm GMT
U.S. crude oil inventories at 3:00 pm GMT
NZ BusinessNZ manufacturing index at 9:30 pm GMT
China’s CPI reports at 1:30 am 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

In case you missed it, the U.K. printed a 0.2% monthly GDP increase in August as expected.

However, industrial and manufacturing production numbers fell short of market expectations and renewed fears of the BOE’s high interest rates possibly derailing the U.K.’s economic recovery.

GBP/USD found resistance at the 1.2330 level for a second time this week and is now trading closer to the 1.2300 psychological level.

As you can see, 1.2300 lines up with a trend line support that’s been valid for days and is just above the 15-minute time frame’s 200 SMA.

Can GBP/USD maintain its lowkey uptrend for the rest of the week?

Or are we looking at a downside breakout in the making?

Uncle Sam will be printing its inflation reports later today and word around is that we could see slightly lower consumer prices.

If the closely watched report reminds traders that the Fed is still one of the most hawkish major central banks around, then USD could regain bullish momentum and drag GBP/USD to its S1 (1.2270) Pivot Point.

But if today’s news releases encourage risk-taking in the markets, then GBP/USD may make another attempt at the 1.2330 intraweek resistance level.

What do you think? Which way will GBP/USD go?

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