Upside hopes for the GBP?
The British monthly GDP is announced on Friday at 09:00 MT time.
Market updates on November 7
Key events ahead:
EU economic forecasts – 12:00 MT (10:00 GMT)
Monetary policy summary by the Bank of England – 14:00 MT (12:00 GMT)
Speech by the BOE Governor Mark Carney – 14:30 MT (12:30 GMT)
The reports that China is ready to negotiate with the US on the possible cancellation of tariffs have increased the risk sentiment in the markets and pushed the risk-weighted currencies up.
- USD/JPY was going down yesterday on the news that the US-China partial trade deal may not be signed in December. The positive update brought an upside momentum to the pair and pushed it upwards to the 108.99 level on H4. If this level is broken, the next resistance will be placed at 109.22. If the risk sentiment switches to negative, the retest of the 108.65 level seems likely. In case of a breakout of the 100-period SMA, bears will target the next support at 108.51.
- GBP/USD is awaiting the monetary policy summary by the Bank of England. No rate changes are expected, that is why it is important to follow the comments by the BOE governor. On the 4-hour chart GBP/USD has been trading within the descending triangle pattern. The price is currently testing the upper border of a pattern at the 1.2874 level. If the BOE is hawkish, we expect a breakout of this level and a test of the 1.2897 level. After that, the next resistance will be placed at 1.2925. From the downside, the retest of the 1.2840 level will increase the chance of a fall towards 1.2808.
- The Australian dollar has also been boosted by the risk-on sentiment. The pair has risen by more than 30 pips after the start of the European trading session and tested the 0.6905 level. Further key levels for bulls will lie at 0.6914 and 0.6923. However, the situation may change quickly. Thus, the aussie may slide below the 0.6877 level and test the 0.6865 level. As far as 0.6865 is broken, the next support will be placed at 0.6850.
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