GBP/USD is almost unchanged in the Wednesday session. In North American trade GBP/USD is trading at the 1.24 line. On the release front, British Net Lending edged up to GBP 4.9 billion, matching the forecast. In the US, Pending Home Sales jumped to 5.5%, well above the forecast of 2.3%. Crude Oil Inventories posted a gain of 0.9 million, shy of the forecast of 1.2 million. On Thursday, the US releases Final GDP and unemployment claims.
It’s “B” day in Brussels, as the UK formally gave notice to the European Union of its intent to leave the bloc. The pound posted considerable losses in the Tuesday session, but is steady on Wednesday. Actual negotiations between the parties may not commence until June, according to recent statements from EU policymakers. The negotiations are supposed to be conducted over a two-year period, and promise to be tough and perhaps acrimonious. The EU has no intentions to “go easy” on the UK and give it a sweet deal, since this would provide ammunition to euro-skeptics on the continent who also want to quit the EU. For its part, the British government needs to reach what it considers a fair deal, and has threatened to leave the EU without a deal if the EU is intransigent in the negotiations. That scenario. labeled “hard Brexit”, would likely take a toll on the British economy and could send the pound downward.
President Donald Trump found himself on the short end of the stick in the rough-and tumble politics in Washington, as his bill to replace the Affordable Care Act was pulled before prior to a vote. This was a humiliating setback for Trump, given that the Republicans enjoy a majority in Congress. The bruising defeat has sent the US dollar sharply lower and market jitters higher. Trump’s administration has stumbled out of the starting gate, and after more than two months in office, he has yet to provide any details over even an outline of economic policy. The inquiry into the Trump administration’s links with Russia is gathering steam, and is another cause for concern for nervous investors. Trump has said he will now focus on tax reform, but he has his work cut out, trying to convince a skeptical Congress and general public that he can deliver the goods and push his tax legislation through Congress.
Wednesday (March 29)
- 4:30 British Net Lending to Individuals. Estimate 4.9B. Actual 4.9B
- 4;30 British Money Supply. Estimate -0.3%. Actual 0.5%
- 4:30 British Mortgage Approvals. Estimate 70K. Actual 68K
- 9:20 US FOMC Member Charles Evans Speech
- 10:00 US Pending Home Sales. Estimate 2.3%. Actual 5.5%
- 10:30 US Crude Oil Inventories. Estimate 1.2M. Actual 0.9M
Upcoming Key Events
Thursday (March 30)
- 8:30 US Final GDP. Estimate 2.0%
- 8:30 US Unemployment Claims. Estimate 244K
*All release times are GMT
*Key events are in bold
GBP/USD for Wednesday, March 29, 2017
GBP/USD March 29 at 9:45 EST
Open: 1.2416 High: 1.2476 Low: 1.2373 Close: 1.2422
- GBP/USD was flat in the Asian session. The pair has been choppy in the European and North American sessions
- 1.2351 is providing support
- 1.2471 is the next resistance line
Further levels in both directions:
- Below: 1.2351, 1.2272 and 1.2154
- Above: 1.2471, 1.2571, 1.2706 and 1.2865
- Current range: 1.2351 to 1.2471
OANDA’s Open Positions Ratio
GBP/USD ratio is showing little movement this week. Currently, long positions have a slender majority (52%). This is indicative of slight trader bias towards the pair breaking out and moving higher.