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GBP/USD – British pound shrugs off soft housing inflation

The British pound has posted slight gains in the Monday session. In North American trade, the pair is trading at 1.2786, up 0.28% on the day. On the release front, British Rightmove HPI dropped 2.3%, its sharpest decline since December. There are no data releases out of the U.S.

U.S consumer data has been strong and helped fuel the booming economy, so a soft consumer confidence report on Friday surprised the markets. The UoM Consumer Sentiment report dropped from 97.1 to 95.3, well below the estimate of 98.1 points. This marked the indicator’s lowest level since January. One reason for the weak report is stronger inflation in the U.S., which has led to higher prices and resulted in less favorable buying conditions. Still, with a tight labor market and strong economic conditions, the markets will be hoping that the weak release is a one-time blip and that consumer spending remains strong in the third quarter.

The U.S dollar has recorded broad gains in August, including 2.6% against the British pound. Much of the greenback’s strength has been a result of the escalating trade war, with President Trump slapping stiff tariffs on a host of trading partners, in particular, China. However, after months of an escalating global trade war, there is hope that tensions will subside, as the U.S and China are holding low-level trade talks this week in Washington. Although a dramatic breakthrough is unlikely, the fact that the two sides are talking has investors cheering. The U.S is unhappy with the Chinese protection of local markets and technology transfers required in order for U.S businesses to operate in China, but it’s questionable if the Chinese will show much flexibility. Both sides have slapped tariffs of $34 billion on each other’s products, with another $16 billion in tariffs scheduled for August 23. If the negotiations lead to the suspension of the upcoming tariffs, risk appetite would rise and likely see the US dollar give back some of its recent gains.

GBP/USD Fundamentals

Sunday (August 19)

Monday (August 20)

*All release times are DST

*Key events are in bold


GBP/USD for Monday, August 20, 2018

GBP/USD August 20 at 13:55 DST

Open: 1.2750 High: 1.2789 Low: 1.2730 Close: 1.2786


GBP/USD Technical

S1 S2 S1 R1 R2 R3
1.2366 1.2589 1.2706 1.2852 1.2996 1.3088

GBP/USD was flat in the Asian session. The pair posted small gains in European trade and has posted more gains in North American trade

Further levels in both directions:

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 [4]

Market Analyst at OANDA [5]
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 Investing.com, Seeking Alpha and FXStreet. Based in Israel, Kenny has been a MarketPulse contributor since 2012.
Kenny Fisher

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