The dollar is dominating today’s price action!
Will it lead to GBP/USD breaking a key short-term support zone?
Before moving on, ICYMI, I’ve listed the potential economic catalysts that you need to watch out for this week. Check them out before you place your first trades today!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
After last weekend’s OPEC+ meeting, Saudi Arabia announced a voluntary addition of 1 million-barrel-per-day production cut, while other voluntary cuts expiring in 2023 will be extended until the end of 2024
Melbourne Institute inflation gauge jumped from 0.2% to 0.9% in May
Australia’s company operating profits up by 0.5% in Q1 2023, lower than the expected 1.5% and Q4’s 12.7% increase
China’s Caixin services PMI improved from 56.4 to 57.1 in May (vs. 55.2 expected) and suggested continued post-lockdown recovery
Price Action News
Overlay of USD Pairs 15-min
Asian session traders have seen a relatively busy data calendar today but the markets still mostly continued Friday’s trends.
That is, the U.S. dollar continued to gain against most of its counterparts as Asian session warriors caught up to Friday’s strong NFP report and the increased chances of a Fed rate hike in June.
So far, the Greenback is only weaker against the Canadian dollar after Saudi Arabia’s surprise output cut. It’s also weaker against the Australian dollar after China printed a better-than-expected Caixin services PMI.
Spain, Italian, French, German, and Eurozone services PMIs due between 7:15 – 7:55 am GMT
Eurozone PPI at 9:00 am GMT
ECB President Lagarde to give a speech at 1:00 pm GMT
U.S. ISM services PMI at 2:00 pm GMT
U.S. factory orders at 2:00 pm GMT
U.K. BRC retail sales monitor at 11:01 pm GMT
Japan’s cash earnings and household spending at 11:30 pm GMT
RBA’s monetary policy statement at 4:30 am GMT (Jun 6)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
GBP/USD 15-min Forex Chart
Cable is testing a key support!
As you can see, early dollar demand has dragged GBP/USD to the S1 (1.2410) of today’s Standard Pivot Points.
Interestingly, S1 lines up with a trend line support that’s been around since late May.
Can GBP/USD recover its lowkey uptrend in the next trading sessions?
The support lines and the bullish divergence on the 15-minute chart is certainly supporting a bounce.
The bearish SMA crossover, however, should at least make GBP bulls think twice.
Let’s see if traders in the European and U.S. sessions extend the Asian session’s USD-friendly environment.
Focus on the Fed’s June rate hike could bust GBP/USD from its higher lows trend and drag the pair to a next support zone (possibly S2 near 1.2370).
But if traders adopt a risk-friendly attitude at the start of the week, then GBP/USD could extend its short-term uptrend and retest previous areas of interest like 1.2450 or 1.2480.
What do you think? Which way will GBP/USD go today?
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