A Second Wave of UK Event Risk for GBP/USD, Equities Ready to Go?

Talking Points:

• UK and US inflation fail to provide decisive views for the the Pound and Dollar to work with respectively
• Employment data from the UK may yet spur serious breaks for GBP pairs and Fed rate speculation rose ahead of minutes
• The S&P 500 and Dow are once again in a position to break a high-profile head-and-shoulders pattern

See the DailyFX Analysts' 2Q forecasts for the Dollar, Euro, Pound, Equities and Gold as well as our favorite 2016 trading opportunities in the DailyFX Trading Guides page.

The tension is making traders antsy. There are a many pairs and benchmarks out there that look technically poised for bigger moves - US equity indexes, Pound crosses, USDollar, Yen pairs, etc - but they have yet to find their spark. GBPUSD and the Sterling pairings offer some of the best looking technical patterns with a near uniform bullish, reversal look. However, speculators have yet to jump into a recovery leg. This past session, the April round of inflation data was holding them back. Ahead, we have the distinct release of the jobs figures and the vague concern surrounding Brexit - though that is far off into the future. Elsewhere, the USDollar still offers a bullish break from last week, but the appetite to extend the move hasn't shown up. US CPI offered no foothold, but Fed rhetoric did bolster speculation of a 2016 hike in market measures. Perhaps today's FOMC minutes will spur more action. And, as we watch the scheduled data cross the wires, it will be important to monitor risk trends with US equity indexes looking particularly faint. We look at all of this in the context of current market conditions in today's Trading Video.

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