GBP/USD continues to lose ground in Tuesday trading. In the North American session, the pair is struggling in the mid-1.52 range. The pound has now coughed up about 130 points since the start of the week. In economic news, Over in the US, CB Consumer Confidence missed the estimate but still remains at high levels. Later in the day, the UK will release BRC Shop Price Index and GfK Consumer Confidence.
On Monday, British CBI Realized Sales started off the week in style. The index, which is based on a survey of retailers and wholesalers, climbed from 1 point all the way to 17, easily beating the estimate of 11 points. It was the indicator’s best performance since January. The strong reading is a sign of increased consumer spending, which is critical for the UK economy to get back on track.
Over in the US, the direction of the housing sector is unclear, with recent releases pointing in all directions. On Monday, Pending Home Sales pointed to a decline of -0.4%, certainly not a strong release. Last week, Existing home sales fell to 5.08 million, way off the estimate of 5.27 million. However, New Home Sales showed strength, jumping from 476 thousand to 496 thousand, easily beating the estimate of 482 thousand. This was its best showing in five years. So where do we stand? With these inconclusive results, the markets will have to wait for the August housing releases, which hopefully will provide a clearer picture of the health and direction of the US housing industry.
Also in the US, CB Consumer Confidence, a key release, dropped slightly to 80.3 points. This was short of the estimate of 81.1 points, but with a reading of above 80 points, the indicator remains in very high territory in comparison to the levels we saw earlier in 2013. Keeping in mind that last week’s UoM Consumer Sentiment hit a multi-year high, consumer confidence is looking rosy in the US. The key question is will stronger consumer confidence translate into more borrowing and spending, which would bolster job growth and increase economic activity.
GBP/USD for Tuesday, July 30, 2013
GBP/USD July 30 at 15:10 GMT
GBP/USD 1.5254 H: 1.5354 L: 1.5245
GBP/USD continues to lose ground in Tuesday trading. The pair broke through the 1.53 line in North American trade, and has dropped to the mid-1.52 line. GBP/USD is receiving support at 1.5203. This is a weak line which could face pressure if the current downward trend continues. The next support line is at 1.5111. On the upside, the pair faces resistance at 1.5309. This is followed by 1.5432.
- Current range: 1.5203 to 1.5309
Further levels in both directions:
- Below: 1.5203, 1.5111, 1.5000, 1.4896 and 1.4781
- Above: 1.5309, 1.5432, 1.5527, 1.5645 and 1.5756
OANDA’s Open Positions Ratio
GBP/USD ratio is showing little change in Tuesday trading. This is not reflected in what we are seeing from the pair, as the pound continues to lose ground lost at the hands of the US dollar. Short positions make up a majority of the ratio, a sharp contrast to what we saw in early July, when long positions dominated. This is indicative of a slight bias in favor of the pound reversing direction and posting gains against the dollar.
The pound failed to take advantage of strong UK numbers and weak data on Monday, and continues to slide lower. Things may settle down for the remainder of Tuesday’s trading, but we can expect some volatility on Wednesday, as there are a string of US releases, including GDP and employment data.
- 13:00 US S&P/CS Composite-20 HPI. Estimate 12.4%. Actual 12.2%
- 14:00 US CB Consumer Confidence. Estimate 81.1 points. Actual 80.3 points
- 23:01 British BRC Shop Price Index
- 23:05 British GfK Consumer Confidence. Estimate -19 points
*Key releases are highlighted in bold
*All release times are GMT