GBP/USD – Pound slips on mixed British jobs numbers

GBP/USD has posted slight losses in the Tuesday session, erasing the gains seen on Monday. In North American trade, GBP/USD is trading at 1 1.3046, down 0.41% on the day. In economic news, British employment numbers were mixed. Wage growth edged up to 3.5%, matching the estimate. However, unemployment claims rose to 28.3 thousand, well above the estimate of 17.3 thousand. There are no major events in the U.S. On Tuesday, the U.K. releases a host of inflation indicators, led by CPI, which is expected to edge up to an even 2.0%.

There are no major U.S events until Thursday, when we’ll get a look at retail sales reports. February data was disappointing, as both retail sales and core retails recorded declines. This pointed to weak consumer spending, and sent the greenback lower. However, the markets are expecting much better news for March, with retail sales expected in at 0.9% and core retail sales at 0.7%. If the actual figures are within expectations, the U.S. dollar could respond with gains.

Britain and the EU agreed to extend Brexit until October, but this appears to be another case of ‘kicking the can down the road’. The deadlock in parliament remains, with lawmakers divided on what happens next, and the exasperated Europeans unwilling to change the withdrawal agreement which Prime Minister May has been unable to pass through parliament. May will be sorely challenged to control her fractured Conservative party. On Monday, May wrote a letter to the civil service, stating that contingencies for a no-deal Brexit would continue, despite the extension. With no clear resolution in sight, the pound is likely to face further headwinds.

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GBP/USD Fundamentals

Tuesday (April 16)

• 4:30 British Average Earnings Index. Estimate 3.5%. Actual 3.5%
  
• 4:30 British Unemployment Rate. Estimate 3.9%. Actual 3.9%
• 4:30 British Claimant Count Change. Estimate 17.3K. Actual 28.3K
• 9:15 US Capacity Utilization Rate. Estimate 79.2%. Actual 7.8.8%
• 9:15 US Industrial Production. Estimate 0.2%. Actual -0.1%
• 10:00 US NAHB Housing Market Index. Estimate 63. Actual 63

Wednesday (April 17)

• 4:30 British CPI. Estimate 2.0%
• All Day – OPEC Meetings

*All release times are DST

*Key events are in bold

GBP/USD for Tuesday, April 16, 2019

GBP/USD April 16 at 12:45 DST

Open: 1.3100 High: 1.3102 Low: 1.3044 Close: 1.3046

GBP/USD Technical

GBP/USD posted small losses in the Asian session. The pair showed little movement in European trade but has dropped considerably in the North American session

• 1.2910 is providing support
• 1.3070 is the next resistance line
• Current range: 1.2910 to 1.3070

Further levels in both directions:

• Below: 1.2910, 1.2841 and 1.2729
• Above: 1.3070, 1.3170, 1.3258 and 1.3362

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