With UK Parliament suspended for the next few weeks, what is going to make GBP/USD move? Although it is still early in the US trading session, a bullish move in DXY (particularly today's bullish candle), can move GPB/USD lower.
Source: Tradingview, FOREX.com
But as of the time of this writing, DXY is up 0.37% and GBP/USD is only down 0.17%.
Another obvious factor that tends to move GBP/USD is economic data releases. Here is economic data released over the last 2 days for the UK:
Actual (MoM) Estimated
Industrial Production (Jul) 0.1% -0.1%
Manufacturing Production (Jul) 0.3% 0.1%
GDP (Jul) 0.3% 0.1%
Trade Balance (Jul) -9.14B -9.60B
Avg hourly Earnings (ex bonus) (Jul) 4.0% 3.7%
Claimant Count Change (Aug) 28.2K 29.3K
Unemployment Rate (Jul) 3.8% 3.9%
Better than expected manufacturing and employment data, across the board. But again, as of the time of this writing, the current price is 1.2328 vs Monday’s close at 1.2344.
Lower than Monday's close
Source: Tradingview, FOREX.com
With a stronger US Dollar and stronger economic data from the UK, one would expect that GBP/USD would be more volatile. However, it is only down 16 pips from Monday’s close. Why?
GBP/USD has primarily been trading on the Brexit theme. And now, with Parliament closed, the market is waiting for one thing: HEADLINES! The more headlines we see, the more volatile the pair will act. Be on the lookout for comments from the UK, EU, and other countries willing to negotiate deals separately with the UK. Watch for headlines, regarding the Irish border, hard Brexit, soft landing Brexit, and the like.
Although this sounds very simplistic, Brexit headlines may be the only thing that will move this pair for the next few weeks! Technicals may not matter once a significant headline is released. But for now, there is horizontal resistance just above at 1.2375. The pair has tried to break through this area numerous times the past few days and failed to do so. Trendline support comes in near 1.2190, then at the highs of the hammer candle on September 3rd at 1.2105.
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