GBP/USD challenging key resistance ahead of eco data

From a technical perspective, the pair continues to challenge the 1.3535 resistance area on a weekly chart

FOREX 2

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




More from Forex

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.