With U.S and British banks closed for holidays on Monday, the currency markets are having a quiet day. In North American trade, GBP/USD is trading at 1.3309, up 0.06% on the day. There are no British or U.S indicators on the schedule. On Tuesday, the US releases CB Consumer Confidence.
It was a disappointing week for the British pound. GBP/USD declined 1.2% and dropped below the 1.33 line for the first time since November. Investors have their doubts about a rate hike in August, and the BoE has done little to dispel these concerns. Last week, BoE Mark Carney was coy about future rate hikes, saying that “interest rates are more likely to go up than not, but at a gentle rate”. CPI, the primary gauge of consumer inflation, dropped to 2.4%, missing the estimate of 2.5%. This was the lowest rate of inflation since January 2017. If bank policymakers don’t feel confident about economic growth, the bank could remain on the sidelines in August, just as it chose to do at the May policy meeting. This could sour investor sentiment and send the pound lower.
The drama and uncertainty continue to swirl around the upcoming summit between President Trump and North Korean leader Kim Jong-un, which may or may not take place on June 12 in Singapore. Just a few days ago, Trump sent a letter to Kim, saying that Trump was canceling the much-anticipated meeting. However, the response from Pyongyang was restrained, and the White House has sent a team to Singapore in case the summit is back on. Meanwhile, the leaders of South Korea and North Korea met on the weekend. That meeting was completely unexpected and raises hopes of a breakthrough in the long conflict between the two Koreas.
Monday (May 28)
- There are no U.S or U.K events
Tuesday (May 29)
- 9:00 US S&P/CS Composite-20 HPI. Estimate 6.5%
- 10:00 US CB Consumer Confidence. Estimate 128.2
*All release times are DST
*Key events are in bold
GBP/USD for Monday, May 28, 2018
GBP/USD May 28 at 11:45 DST
Open: 1.3299 High: 1.3342 Low: 1.3297 Close: 1.3306
GBP/USD edged higher in the Asian session but gave up most of these gains in European trade. The pair is showing little movement in the North American session
- 1.3301 is fluid. Currently, it is a weak support line
- 1.3402 is the next resistance line
- Current range: 1.3301 to 1.3402
Further levels in both directions:
- Below: 1.3301 and 1.3186 and 1.3059
- Above: 1.3402, 1.3494, 1.3613 and 1.3712
OANDA’s Open Positions Ratio
In the Monday session, GBP/USD ratio is showing long positions with a majority (66%). This is indicative of trader bias towards GBP/USD continuing to move upwards.
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.