The Federal Reserve policy conference is due to be the most significant event for markets this week. Forecasts for a rate cut have risen in recent weeks as President Donald Trump’s trade policies stoked concerns over the likelihood of a U.S. recession.
Investors will also be monitoring at central bank meetings in Europe, the U.K., and Japan, as well as the advanced trade developments and economic data. Here’s what you need to know today.
What’s Hot Today
GBP/USD – Plunged to Test Support, Double Bottom In Play
During the previous week, sellers came into the GBP/USD trading and pushed it quite low to the support level of 1.2560. But now, the Cable has closed bullish reversal candles, which are suggesting a bounce off.
In GBPUSD, that bounce from last week could be compared to other major pairs in the effort of gauging future potential. As experience on Tuesday, the rebound in Cable was softer than what was seen in other pairs like EURUSD, alluding to the fact that GBP continues to show a lack of significant strength, even in a backdrop in which the U.S. Dollar is getting hammered by falling rate expectations.
Looking at the technical side, the GBP/USD pair may face resistance around 1,2640 along with support around 1.2560. The moving averages are also suggesting a bearish bias. Watch out key trading levels below.
Key Trading Level: 1.2643
GBP/AUD – Bearish Flag In Spotlight
At the same time, the GBP/AUD is maintaining a slightly bullish trend, perhaps over weaker Aussie. The U.S.-China trade war is massively hitting the Australian dollar as well. It seems like the pair is forming a bearish flap pattern on the 4-hour chart. The pattern is extending support at 1.8300 along with resistance at 1.8400.
The bullish breakout of GBP/AUD may help the pair approaching some key levels fast with the big bullish run last week this level is 1.88414. This level had never been tested since June 2016 nearly three years ago; the current price is only 60 pips off this level.
Now there are correlating pairs that we look out for when trading and most of you might not even know that when these pairings move in 1 direction, others also move. So we are going to let you into a trading secret ;p
Ok so as GBP gets stronger, the UK100 ( British stock market ) gets weaker ( and vice versa), This is to do with foreign investors not wanting to import things from the U.K. into there own country because when GBP has strength. Thus, the investors have to pay more for the goods and lose out on profits. UK100 is nearly at a support level so we can see a bounce higher, this would weaken GBP.
Key Trading Level: 1.8279