The British pound has posted gains on Tuesday, continuing the upward movement seen on Monday. In North American trade, GBP/USD is trading at 1.3884, up 0.26% on the day. In economic news, there are no major indicators in the US or the UK. In the US, Factory Orders were unexpectedly soft, with a decline of 1.4%. This was well short of the estimate of -0.4%. On Wednesday, the US releases ADP Nonfarm Employment Change.
Tensions are growing between London and Brussels as the Brexit deadline of March 2019 looms ever closer. Last week, there were sharp exchanges between the two sides after the EU releases a draft of the legal framework of the Brexit agreement. On Friday, Prime Minister May outlined her vision of relations between the EU and Britain after Brexit. May sought to lower the recent sharp rhetoric surrounding Brexit, saying that both sides needed to show flexibility in order to reach an agreement. May said that she was seeking a free trade agreement with the EU that included financial services. The response from Brussels has been lukewarm, with some policymakers saying that Britain continues to operate under the illusion that it can leave the club but still enjoy the benefits.
Over in the US, the “tariff tussle” shows no sign of being resolved anytime soon. US President Trump appears set on applying stiff tariffs on steel imports, much to the consternation of the European Union and other US trading partners. However, there is plenty of domestic opposition to Trump’s plan, as Republican lawmakers, including House Speaker Paul Ryan, have come out strongly against the move. If Trump doesn’t back down, the Republicans could even resort to legislation to limit Trump’s authority on tariffs. The announcement of the tariffs last week sent the dollar broadly lower, and if the tariffs are introduced, negative investor sentiment could send the greenback to lower levels.
Tuesday (March 6)
- 5:34 British 30-year Bond Auction. Actual 1.94%
- 7:30 US FOMC Member Charles Dudley Speaks
- 10:00 US Factory Orders. Estimate -0.4%. Actual -1.4%
- 10:01 – US IBD/TIPP Economic Optimism. Estimate 58.2. Actual 55.6
- 13:15 British MPC Member Ande Haldane Speaks
- 17:30 US FOMC Member Lael Brainard Speaks
Wednesday (March 7)
- 8:15 US ADP Nonfarm Employment Change. Estimate 194K
*All release times are GMT
*Key events are in bold
GBP/USD for Tuesday, March 6, 2018
GBP/USD March 6 at 11:50 EDT
Open: 1.3848 High: 1.3930 Low: 1.3817 Close: 1.3883
GBP/USD was flat in the Asian session. The pair posted gains in European trade but has given up some of these gains in North American trade.
- 1.3809 is providing support
- 1.3901 was tested earlier in resistance and remains a weak line
Current range: 1.3809 to 1.3901
Further levels in both directions:
- Below: 1.3809, 1.3744, 1.3613 and 1.3480
- Above: 1.3901, 1.4010 and 1.4128
OANDA’s Open Positions Ratio
GBP/USD ratio is almost unchanged in the Tuesday session. Currently, long positions have a slender majority (52%), indicative of slight trader bias towards GBP/USD moving higher.
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.