GBP/USD – Pound Higher, US ISM Manufacturing Dips

The British pound has started the week with slight gains. In the North American session, GBP/USD is trading at 1.4058, up 0.32% on the day. On the release front, British markets are closed for the Easter holiday. In the US, ISM Manufacturing PMI dropped to 59.3, short of the estimate of 60.1 points. On Tuesday, the UK releases Manufacturing PMI, which is expected to soften to 54.8 points.

US indicators ended the week on a mixed note. Unemployment claims impressed, dropping to 215 thousand. This easily beat the estimate of 230 thousand. Consumer confidence also improved, as UoM Consumer Sentiment rose to 101.4, breaking past the 100-barrier for the first time since October. However, the indicator missed the estimate of 101.9 points. On Thursday, British GDP for the fourth quarter came in at 0.4% for a second straight quarter. As well, current account deficit was revised down sharply, coming in at GBP 18.4 billion. This was well below the estimate of GBP 24.0 billion.

Are we at the onset of a new global trading war? On Monday, China responded to recent US tariffs, imposing its own duties on a range of US goods, including frozen pork and wines. This move is bound to escalate tensions between the two economic giants, and has raised fears that a new global trade war could be underway. If the tit-for-tat measures continue, both the US and Chinese economies could suffer, which could lead to a global slowdown. Both sides are digging in tough and pointing fingers, and if tensions worsen, the volatility we’ve seen in the markets is likely to continue.

 

GBP/USD Fundamentals

 Monday (April 2)

  • 9:45 US Final Manufacturing PMI. Estimate 55.7. Actual 55.6
  • 10:00 US ISM Manufacturing PMI. Estimate 60.1. Actual 59.3
  • 10:00 US Construction Spending. Estimate 0.4%. Actual 0.1%
  • 10:00 US ISM Manufacturing Prices. Estimate 72.5. Actual 78.1

 Tuesday (April 3)

  • 4:30 British Manufacturing PMI. Estimate 54.8
  • 19:01 British BRC Shop Price Index

*All release times are GMT

*Key events are in bold

 

GBP/USD for Monday, April 2, 2018

GBP/USD April 2 at 10:30 EDT

Open: 1.4013 High: 1.4078 Low: 1.4013 Close: 1.4058

 

GBP/USD Technical

S1 S2 S1 R1 R2 R3
1.3793 1.3901 1.4010 1.4128 1.4227 1.4345

GBP/USD showed little movement in the Asian session and posted slight gains in European trade

  • 1.4010 is providing support
  • 1.4128 is the next resistance line
  • Current range: 1.4010 to 1.4128

Further levels in both directions:

  • Below: 1.4010, 1.3901 and 1.3793
  • Above: 1.4128, 1.4227, 1.4345 and 1.4452

OANDA’s Open Positions Ratio

In the Monday session, GBP/USD ratio is showing short and long positions are evenly split, indicative of a lack of trader bias towards GBP/USD.

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.