GBP/USD – British pound steady on modest GDP growth

The British pound has posted slight losses in the Tuesday session. In North American trade, the pair is trading at 1.3268, up 0.07% on the day. On the release front, British Manufacturing Production posted a gain of 0.4%, short of the estimate of 1.0%. Still, the gain was welcome news after three consecutive declines. Britain’s trade deficit narrowed to GBP 12.4 billion, but this was larger than the estimate of GBP 11.9 billion. The UK released GDP for the months of March-May, which showed a modest gain of 0.3%. In the U.S, JOLTS Jobs Openings fell to 6.64 million, well below the estimate of 6.88 million. On Wednesday, U.S Core CPI and CPI are both expected to drop by 0.2%.

Are Theresa May’s days as prime minister numbered? Her position is precarious, as her government is in disarray following the stunning resignation of foreign secretary Boris Johnson on Monday. On Sunday, Brexit Secretary David Davis handed in his resignation, saying that the “Chequers Agreement” which the cabinet backed on Friday gave away too much to the European Union. Under that agreement, Prime Minister May presented a ‘soft Brexit’ stance, with the UK agreeing to maintain current customs arrangement for manufacturing and agricultural products after Brexit. However, Brexit hardliners such as Davis and Johnson are against the agreement, which they argue would force Britain to harmonize much of its economy based on the dictates of Brussels. The pound has managed to weather this latest storm, but the currency could face some headwinds if this crisis worsens.

U.S employment data was a mix on Friday, as job growth remained above the 200-thousand level, but wage growth faltered. Nonfarm payrolls dropped to 213 thousand, but this beat the estimate of 195 thousand. Average Hourly Earnings edged lower to 0.2%, shy of the estimate of 0.3%. There was a surprise as the unemployment rate climbed to 4.0%, above the forecast of 3.8%. The data demonstrates that the U.S labor market remains strong, and the economy continues to perform well. The markets remain bullish on U.S growth, despite uncertainty in Europe and elsewhere, as well as the growing threat of an all-out trade war between the U.S and China.


GBP/USD Fundamentals

Tuesday (July 10)

  • 4:30 British Manufacturing Production. Estimate 1.0%. Actual 0.4%
  • 4:30 British Goods Trade Balance. Estimate -11.9B. Actual -12.4B
  • 10:00 US JOLTS Job Openings. Estimate 6.88M. Actual 6.64M

Wednesday (July 11)

  • 8:30 US Core PPI. Estimate 0.2%
  • 8:30 US PPI. Estimate 0.2%
  • 10:00 US Final Wholesale Inventories. Estimate 0.5%
  • 10:30 US Crude Oil Inventories
  • 12:30 US FOMC Member Rafael Bostic Speaks
  • 13:01 US 10-year Bond Auction
  • 16:30 US FOMC Member John Williams Speaks

*All release times are DST

*Key events are in bold

GBP/USD for Tuesday, July 10, 2018

GBP/USD July 10 at 11:40 DST

Open: 1.3259 High: 1.3302 Low: 1.3223 Close: 1.3268

GBP/USD Technical

S1 S2 S1 R1 R2 R3
1.3088 1.3186 1.3263 1.3494 1.3613 1.3613

GBP/USD posted small losses in the Asian session. The pair edged higher in European trade and has ticked higher in the North American session

  • 1.3263 is a weak support level. It could be tested in the North American session
  • 1.3494 is a resistance line
  • Current range: 1.3186 to 1.3263

Further levels in both directions:

  • Below:  1.3263, 1.3186, 1.3088 and 1.2996
  • Above: 1.3494, 1.3613 and 1.3712

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Kenny Fisher

Kenny Fisher

Market Analyst at OANDA
A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities. His work has been published in several major online financial publications including, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.