Unless we see strong countercurrency moves, pound traders will likely focus on Brexit updates and the U.K.’s GDP release.
Which catalysts can affect your pound trades?
I’ve got a short list for ya!
Labor market numbers (Nov 10, 7:00 am GMT)
- The unemployment rate jumped from 4.1% to 4.5% but mostly due to the ONS’ methodology changes
- A net of 153K workers had lost jobs, more than the 12K decrease we saw in July
- GBP weakened during the session, but it was mostly due to EU’s Barnier hinting that there’s not enough progress yet to enter into tunnel talks with the U.K.
- Analysts see the unemployment rate jumping to 4.9% in September
- Jobless claimants could increase by 36K
- A net of 140K are expected to have lost jobs for the month
- Average earnings could improve from 0.0% to 0.9% as September classes start and the economy reopened a bit
Preliminary GDP (Nov 12, 7:00 am GMT)
- The economy is expected to have grown by 15.5% in Q3 after dropping by 19.8% in Q2
- Strong numbers could have minimal impact as they reflect pre-lockdown (part 2!) activities
- Significantly weak activity could revive negative interest rate speculations and weigh on GBP
Brexit updates
- EU and U.K. reps will resume Brexit deal talks in London this week
- The more “high level” the talks appear, the more optimistic market players will be over a possible deal before the year ends
- Watch out for compromises for a “level-playing field” in issues such as access to British fishing waters, workers’ rights, environmental protection, and state aid
Technical snapshot
- Stochastic is flagging GBP/USD’s “overbought” conditions
- GBP/AUD and GBP/NZD have hit “oversold” status on the daily time frame
- EMAs reflect GBP/AUD and GBP/NZD’s short and long-term bearish trends
- Watch out for retracement or reversal opportunities on GBP/JPY, GBP/CHF, and EUR/GBP
- BP/USD, GBP/JPY, GBP/AUD, and GBP/CHF were the most volatile pound pairs in the last seven days
Missed last week’s price action? Read GBP’s price recap for Nov. 2 – 6!
