GBP/USD – Pound Unchanged Despite Soft UK Manufacturing Report

The British pound is almost unchanged in the Monday session. In North American trade, GBP/USD is trading at 1.3191, up 0.02% on the day. On the release front, British CBI Industrial Order Expectations came in at -2, well off the estimate of +9 points. There are no US releases on the schedule.

Is Britain’s manufacturing sector in trouble? CBI Industrial Order Expectations, which surveys sentiment among manufacturers, showed a decline for the first time in over a year. Earlier in October, two key manufacturing indicators softened. Manufacturing Production dipped to 0.4% in August, down from 0.5% a month earlier. Still, this beat the estimate of 0.2%. As well, Manufacturing PMI slowed to 55.9 in September, compared to 56.9 in August. Although the readings still point to expansion, signs of weaker manufacturing activity could unnerve investors.

The negotiations over Britain’s departure from the European Union are supposed to wind up before Britain leaves the EU in March 2019. However, the talks between the parties have foundered, as the sides remain far apart on a number of key issues, including the size of Britain’s bill when it says goodbye to the club. Prime Minister May addressed the 27 EU leaders last week in Brussels, imploring the European to show some flexibility. Still, this didn’t prevent the EU leaders from stating that trade negotiations with Britain would not commence until more progress was made on non-trade matters. Prime Minister May has a razor-thin majority in parliament, and adding to the mix, there are sharp divisions in her cabinet regarding Brexit, with some senior ministers in favor of taking a hard stance and leaving the EU without an agreement if the Europeans fail to soften their position.

UK Factory Orders Slow But Data Not as Bad as it Appears

 

GBP/USD Fundamentals

Monday (October 23)

  • 6:00 British CBI Industrial Order Expectations. Estimate +9. Actual -2

*All release times are GMT

*Key events are in bold

 

GBP/USD for Monday, October 23, 2017

GBP/USD October 23 at 11:55 EDT

Open: 1.3189 High: 1.3227 Low: 1.3157 Close: 1.3191

 

GBP/USD Technical

S1 S2 S1 R1 R2 R3
1.2904 1.3022 1.3122 1.3224 1.3347 1.3444

GBP/USD ticked higher in the Asian session and retracted in European trade. The pair has shown little movement in North American trade

  • 1.3122 is providing support
  • 1.3224 was tested earlier in resistance

Further levels in both directions:

  • Below: 1.3122, 1.3022 and 1.2904
  • Above: 1.3224, 1.3347, 1.3444 and 1.3514
  • Current range: 1.3122 to 1.3224

OANDA’s Open Positions Ratio

GBP/USD ratio is showing little movement in the Monday session. Currently, long and short positions are evenly split, indicative of a lack of trader bias as to what direction GBP/USD will take next.

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.

Kenny Fisher

Kenny Fisher

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.