GBP/USD has posted slight losses in the Monday session, after strong gains on Friday. In North American trade, the pair is trading at 1.3155, down 0.30% on the day. On the release front, there are no British or U.S. indicators on the schedule. BoE Governor Mark Carney will speak at a forum organized by the BoE. On Tuesday, the U.S. releases CB Consumer Confidence and Parliament will vote on the government’s Brexit proposal.
The U.S. dollar retreated on Friday, after a breakthrough in the U.S. government shutdown crisis. President Trump agreed to reopen government services for a 3-week period, even though he did not receive any funds for his border wall with Mexico. Risk sentiment jumped, as investors are optimistic that the temporary deal will lead to an agreement which resolves the shutdown. GBP/USD took full advantage, climbing 1.0 percent and punching above the 1.32 line for the first time since mid-October.
Crisis? What Crisis? Despite the turmoil and uncertainty surrounding Brexit and the May government, the pound continues to gain ground. GBP/USD has now posted weekly gains for six successive weeks, climbing an impressive 4.5% during that time. Many analysts continue to argue that the pound will fall, but so far, the currency has defied these gloomy predictions. The labor markets continues to impress, as wage growth climbed 3.3% in December year-on-year, its strongest level in two years. The participation rate rose while the unemployment rate fell.
All eyes will be on the British parliament on Tuesday, which will vote for a second time on a Brexit agreement. Prime Minister May is expected to lose the vote, which is sure to raise fears of a no-deal Brexit. This would be a nightmarish scenario for the British economy. On Monday, a number of large British supermarkets sent a letter to the government, warning that a no-deal scenario could trigger shortages in fresh produce, most of which is imported from the EU, and could lead to price increases.
Monday (January 28)
- 9:30 BoE Governor Carney Speaks
Tuesday (January 29)
- 10:00 US CB Consumer Confidence. Estimate 125.0
- Tentative – British Parliament Brexit Vote
*All release times are EST
*Key events are in bold
GBP/USD for Monday, January 28, 2019
GBP/USD January 28 at 11:30 EST
Open: 1.3195 High: 1.3211 Low: 1.3137 Close: 1.3155
GBP/USD was mostly flat in the Asian session. The pair posted considerable losses in European trade but has ticked higher in North American trade
- 1.3070 is providing support
- 1.3170 has switched to a resistance line. It is a weak line
- Current range: 1.3070 to 1.3170
Further levels in both directions:
- Below: 1.3070, 1.3000 and 1.2910
- Above: 1.3170, 1.3258 and 1.3375
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