Tag: gbp usd

GBP/USD – British Pound Drops to 2018 Low as Inflation Heads Lower

The British pound has posted considerable losses on the Wednesday session. In North American trade, GBP/USD is trading at 1.3356, down 0.57% on the day. Earlier in the day, the pair touched a low of 1.3305, its lowest level since December. On the release front, British CPI continued to fall, coming in at 2.4%. This was shy of the estimate of 2.5%. Over in the US, New Home Sales dropped to 662 thousand, well off the estimate of 680 thousand. Later in the day, the Federal Reserve releases the minutes from the May policy meeting. On Thursday, the UK releases Retail Sales and the US will publish unemployment claims and Existing Home Sales.

Just a few weeks ago, there was a strong likelihood that the Bank of England would raise interest rates at the May policy meeting. However, a spate of weak economic releases and falling inflation resulted in policymakers standing pat, leaving rates at 0.50%. Are we in for a repeat performance in August? Inflation levels continue to drop, with April CPI falling to 2.4%, down from 2.5% a month earlier. The markets are eyeing two key indicators later in the week – Retail Sales and Second Estimate GDP. If these releases miss expectations, an August rate hike will be in serious doubt. Earlier in the week, the markets priced in an August hike at 50%, but this dropped to just 33% after Wednesday’s weak inflation data. The pound is also under pressure, and the downward spiral is likely to continue if this week’s indicators do not perform well.

On Tuesday, Bank of England Governor Mark Carney testified before a parliamentary committee. Carney acknowledged that growth in the first quarter was weak, blaming “temporary and idiosyncratic factors”, such as massive snowstorms which hampered economic growth. The BoE has forecast growth in Q1 of just 0.4%. As for monetary policy, Carney was subtle, saying that “interest rates are more likely to go up than not, but at a gentle rate”. The markets clearly have their doubts about a rate hike in August, as Wednesday saw the pound fall and the likelihood of an August rate hike drop, following another drop in inflation.

  Fed Minutes to Drive Market as Trade Concerns Recede

  Another Turkish Lira flash crash

GBP/USD Fundamentals

Wednesday (May 23)

  • 4:30 British CPI. Estimate 2.5%. Actual 2.4%
  • 4:30 British PPI Input. Estimate 1.0%. Actual 0.4%
  • 4:30 British RPI. Estimate 3.4%. Actual 3.4%
  • 4:30 British Core CPI. Estimate 2.2%. Actual 2.1%
  • 4:30 British HPI. Estimate 4.4%. Actual 4.2%
  • 4:30 British PPI Output. Estimate 0.3%. Actual 0.3%
  • 6:00 British CBI Realized Sales. Estimate 4. Actual 11
  • 9:45 US Flash Manufacturing PMI. Estimate 56.6. Actual 56.6
  • 9:45 US Flash Services PMI. Estimate 54.9. Actual 55.7
  • 10:00 US New Home Sales. Estimate 680K. Actual 662K
  • 10:30 US Crude Oil Inventories. Estimate -2.5M. Actual
  • 14:00 US FOMC Meeting Minutes

Thursday (May 24)

  • 4:00 BOE Governor Mark Carney Speaks
  • 4:30 British Retail Sales. Estimate 0.8%
  • 8:30 US Unemployment Claims. Estimate 220K
  • 10:00 US Existing Home Sales. Estimate 5.56M

*All release times are DST

*Key events are in bold

GBP/USD for Wednesday, May 23, 2018

GBP/USD May 23 at 10:35 DST

Open: 1.3432 High: 1.3442 Low: 1.3305 Close: 1.3356

GBP/USD Technical

S1 S2 S1 R1 R2 R3
1.3088 1.3186 1.3301 1.3402 1.3494 1.3613

GBP/USD ticked lower in the Asian session. The pair posted considerable losses in European trade and has inched higher in the North American session

  • 1.3301 is providing support
  • 1.3402 is the next resistance line
  • Current range: 1.3301 to 1.3402

Further levels in both directions:

  • Below: 1.3301 and 1.3186 and 1.3059
  • Above: 1.3402, 1.3494, 1.3613 and 1.3712

OANDA’s Open Positions Ratio

GBP/USD ratio is almost unchanged in the Wednesday session. Currently, long positions have a majority (60%), indicative of trader bias towards GBP/USD continuing to head lower.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

GBP/USD – British Pound Unchanged after Carney Testimony

The British pound is showing little movement in the Tuesday session. In North American trade, GBP/USD is trading at 1.3427, unchanged on the day. On the release front, Britain posted a deficit of GBP 6.2 billion, below the estimate of 7.2 billion. This marked the first deficit after a string of three straight surpluses. British CBI Industrial Order Expectations disappointed with a reading of -3, missing the estimate of 2 points. This was the first decline since October. In the US, the Richmond Manufacturing Index jumped to 16, well above the estimate of 9 points. On Wednesday, the UK releases a host of inflation indicators, led by CPI. The Federal Reserve will release the minutes of its May policy meeting.

Bank of England Governor Mark Carney testified earlier on Tuesday before a parliamentary committee, but his remarks have had little impact on the British pound. Carney acknowledged that growth in the first quarter was weak, blaming “temporary and idiosyncratic factors”, such as massive snowstorms which hampered economic growth. The BoE has forecast growth in Q1 of just 0.4%. As for monetary policy, Carney was subtle, saying that “interest rates are more likely to go up than not, but at a gentle rate”. The bank balked at a rate hike earlier in May, due to weakening inflation and a spate of soft economic data. BoE policymakers are unlikely to raise rates before August at the earliest.

After weeks of an escalating trade war between the US and China, there was a breakthrough of sorts on Sunday. The US dollar has posted gains after Treasury Secretary Steven Mnuchin announced that the two sides had made significant progress and the trade war was being ‘put on hold’. Just last week, the White House sounded pessimistic about a deal being reached with China. The two economic giants have imposed stiff tariffs on one another in recent weeks, worth billions in trade. These moves had raised fears of a bilateral trade war between the two largest economies in the world. The respite in tariffs means that the US can sit down with the Chinese and discuss the US trade deficit with China, which President Trump has long complained is a result of a non-level playing field with China. In addition to the trade deficit, the US wants to discuss technology transfers and cyber theft.

  Commodity currencies are beaming

  China to cut Tariffs on some Auto Parts and Vehicles

GBP/USD Fundamentals

Tuesday (May 22)

  • 4:15 British MPC Member Gertjan Vlieghe Speaks
  • 4:30 British Public Sector Net Borrowing. Estimate 7.2B. Actual 6.2B
  • 5:00 British Inflation Report Hearings
  • 6:00 British CBI Industrial Order Expectations. Estimate 2. Actual -3
  • 9:59 US Richmond Manufacturing Index. Estimate 9. Actual 16

Wednesday (May 23)

  • 4:30 British CPI. Estimate 2.5%
  • 4:30 British PPI Input. Estimate 1.0%
  • 4:30 British RPI. Estimate 3.4%
  • 6:00 British CBI Realized Sales. Estimate 4
  • 10:00 US New Home Sales. Estimate 680K
  • 14:00 US FOMC Meeting Minutes

*All release times are DST

*Key events are in bold

GBP/USD for Tuesday, May 22, 2018

GBP/USD May 22 at 11:25 DST

Open: 1.3427 High: 1.3491 Low: 1.3412 Close: 1.3427

GBP/USD Technical

S1 S2 S1 R1 R2 R3
1.3186 1.3301 1.3402 1.3494 1.3613 1.3712

GBP/USD ticked lower in the Asian session. In European trade, the pair posted gains but then retracted. GBP/USD is showing little movement in the North American session

  • 1.3402 is a weak support level
  • 1.3494 is the next resistance line
  • Current range: 1.3402 to 1.3494

Further levels in both directions:

  • Below: 1.3402, 1.3301 and 1.3186
  • Above: 1.3494, 1.3613, 1.3712 and 1.3796

OANDA’s Open Positions Ratio

GBP/USD ratio is unchanged in the Tuesday session. Currently, long positions have a majority (61%), indicative of trader bias towards GBP/USD breaking out and moving lower.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

GBP/USD – British Pound Dips, BoE Inflation Report Next

The British pound has started the week with losses. In Monday’s North American session, GBP/USD is trading at 1.3422, down 35% on the day. On the release front, there are no key indicators on the schedule. British Rightmove HPI gained 0.8% in May, up from 0.4% a month earlier. In the US, the sole event is a speech from FOMC member Raphael Bostic. On Tuesday, the UK releases a host of inflation indicators, led by CPI. The US will publish the Richmond Manufacturing Index.

All eyes will be on BoE Governor Mark Carney on Tuesday, when he testifies on inflation and the economy before a parliamentary committee. Inflation levels have been falling, with CPI hovering at 2.5%, compared to 3.0% early in 2018. The drop in inflation has eased pressure on the BoE to raise rates, and policymakers passed on a rate hike earlier in May, given lower inflation and a spate of soft economic indicators. The odds of a rate hike at the August meeting are just 47%. If Carney presents a dovish stance to lawmakers on Tuesday, the pound could lose ground.

After weeks of an escalating trade war between the US and China, there was a breakthrough of sorts on Sunday. The US dollar has posted gains after Treasury Secretary Steven Mnuchin announced that the two sides had made significant progress and the trade war was being ‘put on hold’. Just last week, the White House sounded pessimistic about a deal being reached with China. The two economic giants had traded stiff tit-for-tat tariffs in recent weeks, worth billions in trade. These moves had raised fears of a bilateral trade war between the two largest economies in the world. The respite in tariffs means that the US can sit down with the Chinese and discuss the US trade deficit with China, which President Trump has long complained is a result of a non-level playing field with China. The news that the sides had backed down sent stock markets higher, and traders will likely be greeted with gains when European markets reopen on Tuesday.

  A test of the breakouts

Meaningful Progress Made in US and China Trade Talks

 

GBP/USD Fundamentals

Sunday (May 20)

  • 19:01 British Rightmove HPI. Actual 0.8%

Monday (May 21)

  • 11:30 US FOMC Member Rafael Bostic Speaks

Tuesday (May 22)

  • 4:30 British Public Sector Net Borrowing. Estimate 7.2B
  • 5:00 British Inflation Report Hearings
  • 6:00 CBI Industrial Order Expectations. Estimate 2
  • 10:00 US Richmond Manufacturing Index. Estimate 9

*All release times are DST

*Key events are in bold

 

GBP/USD for Monday, May 21, 2018

GBP/USD May 21 at 10:20 DST

Open: 1.3470 High: 1.3584 Low: 1.3391 Close: 1.3423

 

GBP/USD Technical

S1 S2 S1 R1 R2 R3
1.3186 1.3301 1.3402 1.3494 1.3613 1.3712

GBP/USD lost ground in the Asian session. The pair edged lower in European trade but recovered these losses. GBP/USD is showing little movement in the North American session

  • 1.3402 was tested earlier in support. It remains a weak line
  • 1.3494 is the next resistance line
  • Current range: 1.3402 to 1.3494

Further levels in both directions:

  • Below: 1.3402, 1.3301 and 1.3186
  • Above: 1.3494, 1.3613, 1.3712 and 1.3796

OANDA’s Open Positions Ratio

In the Monday session, GBP/USD ratio is showing long positions with a majority (61%). This is indicative of trader bias towards GBP/USD reversing directions and moving lower.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

GBP/USD – Pound Edges Lower, US Posts Mixed Construction Data

The British pound has posted slight losses in the Wednesday session. In the North American session, GBP/USD is trading at 1.3477, down 0.21% on the day. On the release front, British CB Leading Index. In the US, construction numbers were mixed. Building Permits remained steady at 1.35 million, matching the forecast. Housing Starts dropped to 1.29 million, short of the estimate of 1.32 million. On Thursday, the U.S releases Philly Fed Manufacturing Index and unemployment claims.

British employment numbers were a mix on Tuesday. Unemployment claims and wage growth both missed their forecasts, but the unemployment rate remained steady, and the participation rate rose to 75.6%, the highest rate ever recorded. Policymakers at the Bank of England will have to digest the mixed job numbers, as the employment market and wage growth will be important factors in the bank’s thought process regarding rate future rate hikes. Weak economic numbers dissuaded the BoE from raising rates last week, but if second-quarter data is stronger, the bank could press the rate trigger at its August meeting.

In the U.S, retail sales and core retail sales posted gains in April, although both indicators fell short of the estimates. Still, consumer spending is improving after a sluggish first quarter. Investors liked what they saw, and the US dollar was broadly higher on Tuesday. At the same time, a new concern is higher gas prices, which could put a dent in consumers’ wallets and hurt spending. Oil prices have hit their highest levels in over 3 years, and with the US leaving the Iran nuclear deal and escalating tensions in the Middle East, gasoline prices could remain at high levels.

I’m a believer

Italian Politics Pounds Euro

 

GBP/USD Fundamentals

Wednesday (May 16)

  • 8:30 US Building Permits. Estimate 1.35M. Actual 1.35M
  • 8:30 US FOMC Member Raphael Bostic Speaks
  • 8:30 US Housing Starts. Estimate 1.32M. Actual 1.29M
  • 9:15 US Capacity Utilization Rate. Estimate 78.4%. Actual 78.0%
  • 9:15 US Industrial Production. Estimate 0.6%. Actual 0.7%
  • 9:30 British CB Leading Index. Actual -0.2%
  • 10:00 US Mortgage Delinquencies. Actual 4.63%
  • 10:30 US Crude Oil Inventories. Estimate -1.1M. Actual -1.4M

Thursday (May 17)

  • 8:30 US Philly Fed Manufacturing Index. Estimate 21.1
  • 8:30 US Unemployment Claims. Estimate 219K

*All release times are DST

*Key events are in bold

 

GBP/USD for Wednesday, May 16, 2018

GBP/USD May 16 at 12:00 DST

Open: 1.3505 High: 1.3521 Low: 1.3455 Close: 1.3477

 

GBP/USD Technical

S1 S2 S1 R1 R2 R3
1.3186 1.3301 1.3402 1.3494 1.3613 1.3712

GBP/USD showed little movement in the Asian session. The pair lost ground in European trade but has recovered some of those losses in the North American session

  • 1.3402 is providing support
  • 1.3494 was tested in resistance earlier. It is a weak line
  • Current range: 1.3402 to 1.3494

Further levels in both directions:

  • Below: 1.3402, 1.3301 and 1.3186
  • Above: 1.3494, 1.3613, 1.3712 and 1.3796

OANDA’s Open Positions Ratio

GBP/USD ratio is showing some movement towards short positions. Currently, long positions have a majority (59%), indicative of trader bias towards GBP/USD reversing directions and moving lower.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

GBP/USD – British Pound Under Pressure as UK Employment Data Falters

The British pound has posted losses in the Tuesday session. In the North American session, GBP/USD is trading at 1.3495, down 0.44% on the day. On the release front, UK employment numbers disappointed. Wage growth dropped to 2.6% in March, down from 2.8% a month earlier. This missed the estimate of 2.7%. Unemployment claims jumped to 31.2 thousand, well above the forecast of 13.3 thousand. The unemployment rate remained at 4.2%, matching the estimate. In the US, retail sales dipped to 0.3%, shy of the estimate of 0.4%. Core retail sales edged up to 0.3% but missed the forecast of 0.5%. On Wednesday, the US will release Housing Starts and Building Permits.

British employment numbers were a mixed bag on Tuesday. Unemployment claims and wage growth both missed their forecasts, but the unemployment rate remained steady, and the participation rate rose to 75.6%, the highest rate ever recorded. Policymakers at the Bank of England will have to digest the mixed job numbers, as the employment market and wage growth will be important factors in the bank’s thought process regarding rate future rate hikes. Weak economic numbers dissuaded the BoE from raising rates last week, but if second quarter data is stronger, the bank could press the rate trigger at its August meeting.

In the U.S, Retail sales reports were shy of the estimates in April, but investors preferred to focus on the positive, noting that both retail sales and core retail sales posted gains, as consumer spending is improving after a sluggish first quarter. A new concern is higher gas prices, which could put a dent in consumers’ wallets and hurt spending. Oil prices have hit their highest levels in over 3 years, and with the US leaving the Iran nuclear deal and escalating tensions in the Middle East, gasoline prices could remain at high levels.

Yields in focus, again

Rate Differentials and Trade Fears Handcuff Capital Markets  

GBP/USD Fundamentals

Tuesday (May 15)

  • 4:30 British Average Earnings Index. Estimate 2.7%. Actual 2.6%
  • 4:30 British Claimant Count Change. Estimate 13.3K. Actual 31.2K
  • 4:30 British Unemployment Rate. Estimate 4.2%. Actual 4.2%
  • 8:30 US Core Retail Sales. Estimate 0.5%. Actual 0.3%
  • 8:30 US Retail Sales. Estimate 0.4%. Actual 0.3%
  • 8:30 US Empire State Manufacturing Index. Estimate 15.1. Actual 20.1
  • 10:00 US Business Inventories. Estimate 0.2%
  • 10:00 US NAHB Housing Market Index. Estimate 70
  • 12:45 US FOMC Member John Williams Speaks
  • 16:00 US TIC Long-Term Purchases

Wednesday (May 16)

  • 8:30 US Building Permits. Estimate 1.35M
  • 8:30 US Housing Starts. Estimate 1.33M

*All release times are DST

*Key events are in bold

 

GBP/USD for Tuesday, May 15, 2018

GBP/USD May 15 at 11:00 DST

Open: 1.3556 High: 1.3572 Low: 1.3451 Close: 1.3495

GBP/USD Technical

S1 S2 S1 R1 R2 R3
1.3186 1.3301 1.3402 1.3494 1.3613 1.3712

GBP/USD inched lower in the Asian session and recorded further losses in European trade. The pair is steady in North American trade

  • 1.3402 is providing support
  • 1.3494 has switched to a resistance line following losses by GBP/USD. It is a weak line
  • Current range: 1.3402 to 1.3494

Further levels in both directions:

  • Below: 1.3402, 1.3301 and 1.3186
  • Above: 1.3494, 1.3613, 1.3712 and 1.3796

OANDA’s Open Positions Ratio

GBP/USD ratio is showing little movement in the Tuesday session. Currently, long positions have a majority (63%), indicative of trader bias towards GBP/USD continuing to head upwards.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Live FX Analysis – 15 May 2018 (Video)

It’s been an interesting month in financial markets in which the dollar has rediscovered its mojo, geopolitical risk has remained heightened, US corporates have shown their strength and central banks around the world have become less bullish.

Ahead of another busy data week, Senior Market Analyst Craig Erlam gives his views on the markets at the moment and takes you through the week’s key economic events.

Craig also gives his live analysis on EURUSD (13:23), GBPUSD (15:08), EURGBP (17:25), AUDUSD (19:08), USDCAD (20:33), GBPCAD (22:02), NZDUSD (25:22), USDJPY (27:14), GBPJPY (29:15) and EURJPY (30:53).

DAX Trading Sideways after Eurozone, Germany GDP

US Futures Pare Gains Ahead of Retail Sales Data

Rate Differentials and Trade Fears Handcuff Capital Markets

US Futures Pare Gains Ahead of Retail Sales Data

US Equities Looking Less Vulnerable After Recent Breakouts

US equity markets have been on a good run of late but are poised to open slightly lower on Tuesday, paring the steady gains achieved over the last couple of weeks.

This comes after the Dow and S&P 500 both surpassed the previous peak which came almost a month earlier in what could be a symbolic indication that the worst of this particular correction is now behind us. From a technical standpoint, the failure to make a new low a couple of weeks ago before now making a new high is encouraging as a signals the end of a downtrend.

Retail Sales Expected to Rebound After Tough Winter

There’s a number of data releases that will grab traders’ attention today and could determine whether we see an early rebound in stock markets. The most notable of these is the retail sales data for April, which is expected to be relatively good for a second consecutive months following a few poor numbers that were a little worrying. Core retail sales are also expected to be good, rising by 0.5% compared to March.

Rate Differentials and Trade Fears Handcuff Capital Markets

UK Jobs Data in Line as Wages Rise Most Since 2015

The UK labour market figures offered little support to the struggling pound this morning, which continued to hover around four month lows against the dollar and look vulnerable to further declines. While unemployment remains at the lowest since 1975 and employment at the highest since records began, the numbers were all pretty much in line with expectations and was therefore priced in.

GBPUSD Daily Chart

OANDA fxTrade Advanced Charting Platform

The potential for upside would have likely come from the earnings data but even this was in line, although excluding bonuses, they did rise to 2.9% which is the highest since August 2015. Still, with inflation still high, real wages were unchanged once bonuses were taken into consideration which is likely to continue to weigh on the economy and confuse matters for the Bank of England, which is being heavily criticised after not raising rates last week.

China Data Flash

Clearly traders don’t view the increase in wages as increasing the chances of a rate hike from current expectations. It could well be that traders view the recent wage data as being a temporary response to last year’s increase in the cost of living due to higher inflation as opposed to something more sustainable or that the recent improvement is being flattered by the year on year comparison after a dip 12 months ago.

Economic Calendar

For a look at all of today’s economic events, check out our economic calendar.

GBP/USD – British Pound Higher, Investors Eye U.K Employment Numbers

The British pound has started the week with gains. In the North American session, GBP/USD is trading at 1.3596, up 0.41% on the day. On the release front, there are no economic indicators in the U.K or the U.S. Tuesday will be busy, as the U.K. publishes unemployment claims and wage growth. Over in the U.S, the focus is on retail sales reports.

It was an uneventful week for the pound, and even a rate announcement from the Bank of England didn’t elicit much response from the currency. The markets were on the money with their estimates, correctly predicting that the bank would hold rates at 0.50% and that two of nine MPC members would vote for an immediate rate hike. In the BoE inflation report, policymakers noted concern over softness in consumer borrowing and the housing market. The markets were not surprised by the BoE decision, given the fact that first-quarter growth was just 0.1% and consumer spending and inflation levels weakened. On Friday, there was no relief from the NIESR GDP Estimate, which indicated a 0.1% expansion of the economy in April. Will economic growth rebound in the second quarter? Policymakers are adopting a wait-and-see attitude towards rate hikes, with any increase unlikely before August, which is when the next inflation report will be released.

With the U.S economy continuing to perform well in 2018, it comes as no surprise that the U.S consumer is feeling very optimistic. On Friday, the UoM Consumer Sentiment improved to 98.8 in April, beating the estimate of 98.4 points. The U.S labor market is at near or full employment, which has resulted in a slowdown in job growth due to a shortage of skilled workers. This was underscored last week, as JOLTS Job Openings climbed to a record 6.6 million. At the same time, inflation levels remain low, as the Federal Reserve target of 2 percent remains elusive. CPI rebounded with a gain of 0.2%, but this fell short of the estimate of 0.3%. Core CPI edged lower to 0.1%, shy of the forecast of 0.2%. Inflation levels will be an important factor for the Fed in its monetary policy projection, which remains at two more hikes in 2018. The odds of a rate hike at the June hike stands close to 100%.

A crowded tale of the tape

U.S Dollars Plight shaped by Trade Talks and Geopolitics

GBP/USD Fundamentals

Monday (May 14)

  • 2:45 US FOMC Member Loretta Mester Speaks

Tuesday (May 15)

  • 4:30 British Average Earnings Index. Estimate 2.7%
  • 4:30 British Claimant Count Change. Estimate 13.3K
  • 4:30 British Unemployment Rate. Estimate 4.2%
  • 8:30 US Core Retail Sales. Estimate 0.5%
  • 8:30 US Retail Sales. Estimate 0.4%
  • 8:30 US Empire State Manufacturing Index. Estimate 15.1

*All release times are DST

*Key events are in bold

GBP/USD for Monday, May 14, 2018

GBP/USD May 11 at 11:45 DST

Open: 1.3541 High: 1.3608 Low: 1.3540 Close: 1.3596

GBP/USD Technical

S1 S2 S1 R1 R2 R3
1.3301 1.3402 1.3494 1.3613 1.3712 1.3796

GBP/USD edged higher in the Asian and European sessions. The pair has posted small gains in North American trade

  • 1.3494 is providing support
  • 1.3613 is the next resistance line. It is weak and could be tested in the North American session
  • Current range: 1.3494 to 1.3613

Further levels in both directions:

  • Below: 1.3494, 1.3402, 1.3301 and 1.3186
  • Above: 1.3613, 1.3712 and 1.3796

OANDA’s Open Positions Ratio

GBP/USD ratio is showing little movement in the Monday session. Currently, long positions have a majority (65%), indicative of trader bias towards GBP/USD continuing to head upwards.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

GBP/USD – Pound Rebounds, U.S Consumer Confidence Ahead

The British pound has recorded gains on Friday, erasing the losses seen in the Thursday session. In the North American session, GBP/USD is trading at 1.3564, up 0.34% on the day. On the release front, there are no British events, after a very busy Thursday. In the U.S, the markets are expecting UoM Consumer Sentiment to improve to 98.4 points.

The pound showed little movement on Thursday, as the Bank of England held the benchmark interest rate at 0.50 percent. As expected, two of nine MPC members voted for an immediate rate hike. In the BoE inflation report, policymakers noted concern over softness in consumer borrowing and the housing market. The markets were not surprised by the BoE decision, given the fact that first-quarter growth was just 0.1% and consumer spending an inflation levels weakened. On Friday, there was no relief from the NIESR GDP Estimate, which indicated a 0.1% expansion of the economy in April. Will economic growth rebound in the second quarter? Policymakers are adopting a wait-and-see attitude towards rate hikes, with any increase unlikely before August, which is when the next inflation report will be released.

Key U.S indicators were mixed on Thursday. Unemployment claims impressed, remaining unchanged at 211 thousand. This easily beat the estimate of 219 thousand. The US labor market is at near or full employment, which has resulted in a slowdown in job growth due to a shortage of skilled labors. Earlier in the week, JOLTS Job Openings climbed to a record 6.6 million. At the same time, inflation levels remain low, as the Federal Reserve target of 2 percent remains elusive. CPI rebounded with a gain of 0.2%, but this fell short of the estimate of 0.3%. Core CPI edged lower to 0.1%, shy of the forecast of 0.2%. Inflation levels will be an important factor for the Fed in its monetary policy projection, which remains at two more hikes in 2018. According to the CME Group, the odds that the Fed will press the rate trigger at the June meeting stand at 100%.

U.S CPI takes the dollar off the boil

 

GBP/USD Fundamentals

Friday (May 11)

  • 10:00 US Preliminary UoM Consumer Sentiment. Estimate 98.4
  • 10:00 US Preliminary UoM Inflation Expectations

*All release times are DST

*Key events are in bold

 

GBP/USD for Friday, May 11, 2018

GBP/USD May 11 at 7:35 DST

Open: 1.3518 High: 1.3582 Low: 1.3502 Close: 1.3564

 

GBP/USD Technical

S1 S2 S1 R1 R2 R3
1.3301 1.3402 1.3494 1.3613 1.3712 1.3796

GBP/USD ticked higher in the Asian session and has edged upwards in European trade

  • 1.3494 is providing support
  • 1.3613 is the next resistance line
  • Current range: 1.3494 to 1.3613

Further levels in both directions:

  • Below: 1.3494, 1.3402, 1.3301 and 1.3186
  • Above: 1.3613, 1.3712 and 1.3796

OANDA’s Open Positions Ratio

GBP/USD ratio is showing little movement in the Friday session. Currently, long positions have a majority (63%), indicative of trader bias towards GBP/USD continuing to head upwards.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

GBP/USD – British Pound Loses Ground as BoE Maintains Rates

The British pound has lost ground on Thursday, after showing little movement during the week. In the North American session, GBP/USD is trading at 1.3480, down 0.49% on the day. On the release front, it’s a busy day on both sides of the pond. British Manufacturing Production declined for a second straight month. The reading of -0.1% was just above the forecast of -0.2%. Britain’s trade deficit widened to GBP -12.3 billion, above the estimate of -11.2 billion. As expected, the Bank of England held the course on monetary policy, maintaining interest rates at 0.50%. In the US, unemployment claims dropped to 211 thousand, easily beating the estimate of 219 thousand. US inflation numbers were not as strong. CPI rebounded with a gain of 0.2%, but this fell short of the estimate of 0.3%. Core CPI edged lower to 0.1%, shy of the forecast of 0.2%. On Friday, the key event is UoM Consumer Sentiment.

Market predictions about the Bank of England were on the money, and the pound has showed little reaction on Thursday. As expected, the BoE held rates at 0.50%, with only two of nine MPC members voting for a rate hike. In the inflation report, policymakers noted concern over softness in consumer borrowing and the housing market. The markets were not surprised by the BoE decision, given the fact that first-quarter growth was just 0.1% and consumer spending an inflation levels weakened. Policymakers are hopeful that economic growth will rebound in Q2, and are adopting a wait-and-see attitude towards rate hikes, with a rate hike unlikely before August, which is when the next inflation report will be released.

The markets continue to digest the fallout from President Trump’s dramatic speech on Tuesday. Trump announced that the US would withdraw from the Iran nuclear deal. Trump blasted the agreement and said that the US would impose stiff sanctions on Iran. However, Britain, France and Germany have said they plan to remain in the deal, and will be holding a high-level meeting with Iranian leaders on how the agreement can be salvaged. With the US acknowledging that the White House does not have a ‘Plan B’, it’s unclear what happens next. Meanwhile, tensions between Israel and Iran are at a fever pitch after Israel struck dozens of military targets in Syria on Tuesday. If there are further military skirmishes involving these countries, the currency markets could show strong volatility.

GBP Slips as BoE Delays Hike and Lowers Forecasts

GBP/USD Fundamentals

Thursday (May 10)

  • 4:30 British Manufacturing Production. Estimate -0.2%. Actual -0.1%
  • 4:30 British Goods Trade Balance. Estimate -11.2B. Actual -12.3B
  • 4:30 British Construction Output. Estimate -2.1%. Actual -2.3%
  • 4;30 British Industrial Production. Estimate 0.1%. Actual 0.1%
  • 7:00 BoE Inflation Report
  • 7:00 MPC Official Bank Rate Votes. Estimate 2-0-7. Actual 2-0-7
  • 7:00 BoE Monetary Policy Summary
  • 7:00 BoE Official Bank Rate. Estimate 0.50%. Actual 0.50%
  • 7:00 British Asset Purchase Facility. Estimate 435B. Actual 435B
  • 7:00 British MPC Purchase Facility Votes. Estimate 0-0-9. Actual 0-0-9
  • 7:01 British NIESR GDP Estimate. Actual 0.1%
  • 8:30 Unemployment Claims. Estimate 219K. Actual 211K
  • 8:30 US CPI. Estimate 0.3%
  • 8:30 US Core CPI. Estimate 0.2%
  • 8:30 US Unemployment Claims. Estimate 219K
  • 10:30 US Natural Gas Storage. Estimate 81B
  • 13:01 US 30-year Bond Auction
  • 14:00 US Federal Budget Balance. Estimate 201.2B

*All release times are DST

*Key events are in bold

GBP/USD for Thursday, May 10, 2018

GBP/USD May 10 at 10:25 DST

Open: 1.3547 High: 1.3618 Low: 1.3473 Close: 1.3475

GBP/USD Technical

S1 S2 S1 R1 R2 R3
1.3186 1.3301 1.3402 1.3494 1.3613 1.3712

GBP/USD edged lower in the Asian session. In European trade, the pair edged upwards but then retracted and gave up these gains. The pair continues to lose ground in North American trade

  • 1.3402 is providing weak support
  • 1.3494 has switched to a resistance role after losses by GBP/USD on Thursday. It is a weak line
  • Current range: 1.3402 to 1.3494

Further levels in both directions:

  • Below: 1.3402, 1.3301 and 1.3186
  • Above: 1.3494, 1.3613, 1.3712 and 1.3796

OANDA’s Open Positions Ratio

GBP/USD ratio is almost unchanged in the Thursday session. Currently, long positions have a majority (65%), indicative of trader bias towards GBP/USD reversing directions and moving upwards.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.