GBP/USD – British pound gains ground ahead of crucial parliament vote

GBP/USD has posted considerable gains on Monday, erasing the losses seen on Friday. In North American trade, the pair is trading at 1.3094, up 0.60% on the day. Earlier on Monday, the pair touched a low of 1.2961, its lowest level since February 19. In economic news, there are no British indicators. In the U.S., retail sales rebounded in February. Core retail sales sparkled with a 0.9% gain, up from -1.8% in January. Retail sales improved to 0.2%, compared to -1.2% in the previous release. Both indicators beat their estimates. On Tuesday, the U.S. releases CPI numbers.

All eyes will be on the British parliament this week, starting with a vote on the government’s withdrawal agreement on March 12. With no signs that this proposal will be different than the one which was shot down in parliament in January, the vote could turn into an embarrassment for the May government. If lawmakers vote down this proposal, they will vote the next day on two separate proposals – one on a no-deal Brexit, and the second on requesting the EU to extend Article 50 and delay Brexit past March 29. With all the uncertainty surrounding the drama in parliament, traders should be prepared for volatility from GBP/USD.

In the U.S., there was a surprisingly low reading from nonfarm payrolls. The indicator showed that the economy eked out just 20 thousand jobs, much worse than the forecast of 180 thousand. On a brighter note, wage growth improved to 0.4%, above the estimate of 0.3%. Despite the weak NFP report, the pound could not take advantage and posted losses on Friday, capping a week in which GBP/USD dropped 1.4%.

Trade trembles and Brexit bumbling start the week

Brexit and sterling volatility expected

GBP/USD Fundamentals

Monday (March 11)

  • 8:30 US Core Retail Sales. Estimate 0.4%. Actual 0.9%
  • 8:30 US Retail Sales. Estimate 0.0%. Actual 0.2%
  • 9:00 British MPC Member Haskel Speaks
  • 9:56 U.S. Business Inventories. Estimate 0.6%. Actual 0.6%
  • 20:00 US Federal Chair Powell Speaks

Tuesday (March 12)

  • 5:30 British GDP. Estimate 0.2%
  • 5:30 British Manufacturing Production. Estimate 0.2%
  • 13:30 US CPI. Estimate 0.2%
  • 13:30 US Core CPI. Estimate 0.2%

*All release times are EST

*Key events are in bold

GBP/USD for Monday, March 11, 2019

GBP/USD March 11 at 11:15 EST

Open: 1.3016 High: 1.3097 Low: 1.2961 Close: 1.3092

GBP/USD Technical

S1 S2 S1 R1 R2 R3
1.2831 1.2910 1.3070 1.3170 1.3258 1.3362

GBP/USD posted small losses in the Asian session. The pair reversed directions and posted considerable gains in European trade. The upward movement has continued in North American trade

  • 1.3070 has switched to a support role after gains by GBP/USD on Monday
  • 1.3170 is the next resistance line
  • Current range: 1.3070 to 1.3170

Further levels in both directions:

  • Below: 1.3070, 1.2910 and 1.2831
  • Above: 1.3170, 1.3258, 1.3362 and 1.3460

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

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.
Kenny Fisher

Latest posts by Kenny Fisher (see all)