GBP/USD challenging key resistance ahead of eco data
Gary Christie December 9, 2020 4:13 PM
From a technical perspective, the pair continues to challenge the 1.3535 resistance area on a weekly chart
Traders waiting for a significant breakaway from the pair’s choppy action this year.
The US Dollar was bullish against most of its major pairs on Wednesday with the exception of the AUD and GBP. On the US economic data front, the Mortgage Bankers Association's Mortgage Applications fell 1.2% for the week ending December 4th, compared to -0.6% in the previous week. Wholesale Inventories rose 1.1% on month in the October final reading (+0.9% expected), from +0.9% in the October preliminary reading. Finally, U.S. Job Openings increased to 6.652 million on month in October (6.300 million expected), compared to a revised 6.494 million in September.
On Thursday, Initial Jobless Claims for the week ending December 5th are expected to rise to 725K, from 712K in the week before. Continuing Claims for the week ending November 28th are expected to fall to 5,210K, from 5,520K in the prior week. The Consumer Price Index for November is expected to increase 0.1% on month, from unchanged in October. Finally, the Monthly Budget Deficit for November is expected to contract to 200.0 billion dollars on month, from 284.1 billion dollars in October.
The Euro was bearish against all of its major pairs. In Europe, the German Federal Statistical Office has posted October trade balance at 19.4 billion euros surplus (vs 18.5 billion euros surplus expected). Exports rose 0.8%, vs +1.3% expected, and Imports were posted at +0.3%, vs +1.2% expected.
The Australian dollar was bullish against all of its major pairs.
Looking at movers, the GBP/USD pushed 46 pips higher in Wednesday's trading. We will see the UK trade balance as well as industrial and manufacturing production data Thursday morning. The GBP/USD has shown an average of 52.92 pips of volatility in the 4 hours after past events.
From a technical perspective, the pair continues to challenge the 1.3535 resistance area on a weekly chart. If the pair can manage to break above 1.3535 we can look towards 1.378 as the next key resistance level target. A break below the 20-week moving average near 1.308 would be a bearish signal.
Source: GAIN Capital, TradingView
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