GBP/USD was under threat once again as the chief EU Negotiator Michel Barnier rejected the British proposal on customs for a common rule book. Will the pound recover? Here are the key events and an updated technical analysis for GBP/USD.
The time is running and Brexit negotiations are far from being finished. GDP reached the best in four years in the US of 4.1%, but below the overrated expectations, weighing on the dollar. The easier way proceeds towards the trade also sent the currency a bit lower. In spite of that, Brexit pressure sent GBP/USD down on the week.
Pound/dollar made an attempt to move higher but did not manage to conquer the 1.3205 level mentioned last week. It eventually closed at lower ground. 1.3615 capped the pair in late 2017. 1.3470 was a flutter high in early June.
The round number of 1.34 could impart further support. 1.3365 was a swing high in mid-July. Further down, 1.3315 was a swing high in late June.
1.3215 was the high point for the pair in mid-July and a lower high on the chart.
1.3100 was a swing low in mid-June and 1.3050 is the latest 2018 low. The round number of 1.3000 awaits below. Even lower, 1.2955 is the low point seen in mid-July.
Net Lending to Individuals: Monday, 8:30. An increased level of borrowing results in more overall economic activity. Net contributing be upright at 5.3 billion pounds in June and the same level is forecast now.
M4 Money Supply: Monday, 8:30. The amount of money in movement increased by 0.4% in May, the second consecutive month of rises. A faster clip forecast now: 0.6%
Mortgage Approvals: Monday, 8:30. The official number transpire after the High Street Lending figure but still have a smash. The total number of mortgages is projected to rise from 65K in May TO 66K in June.
GFK Consumer Confidence: Monday, 23:01. This broad look over of 2,000 consumers despondent, with a drop to 9 points in June, reflecting growing negative expectation among shoppers. A repeat of the same score is on the cards for July.
BRC Shop Price Index: Tuesday, 23:01. The British Retail Consortium’s indicator of inflation showed a drop of 0.5% y/y in June, a slower pace than beforehand. We could see another drop now.
Nationwide HPI: Wednesday, 6:00. The relatively early gauge of house prices surprised in June with a leap of 0.5% in prices. Amore modest increase of 0.1% is forecast now.
Manufacturing PMI: Wednesday, 8:30. The first of Markit’s purchasing managers’ indicate for the small, yet important manufacturing sector. The forward-looking figure gets up at 54.4 points in June and small slide to 54.2 is expected for July. The 50-point portal separates expansion from contraction.
Construction PMI: Thursday, 8:30. The construction sector has seen its ups and down in recent months, including a temporary plunge into contraction region. A small slide from 53.1 to 52.9 points is expected now.
UK Rate Decision: Thursday, 11:00, press conference at 11:30. The Bank of England suggested it would enhance rates in its August meeting. A walk to 0.75% would send the interest rate to the extreme level since the financial crisis. However, as inflation remained fixed at 2.4%, retail sales disappointed in June, and with Brexit unpredictability, the BOE may yet surprise by not moving.
Service PMI: Friday, 8:30. The third and last of Markit’s purchasing managers’ indicate the UK is the most important one. The services sector had an OK PMI score of 55.1 in June, above the 50-point get the way that separates enlargement from contraction. A drop to 54.7 is on the cards.
The rate walk is fully priced in and no further hikes are likely anytime soon. On the other hand, Brexit uncertainty is not. In addition, the Fed’s hawkishness is set to continue.