GBP/USD – British pound steadies after dismal week

GBP/USD is showing little movement on Monday. In the North American session, the pair is trading at 1.2740, up 0.20% on the day. The pair dropped 2.2% last week, its sharpest weekly loss since October 2017. On the release front, British CB Leading Index posted a gain of 0.5%, after a decline of 0.4% in the previous release. There are no U.S. data events on the schedule. On Tuesday, BoE Governor Mark Carney testifies about inflation and the economic outlook before the Treasury Committee. The U.K. will release CBI Industrial Order Expectations and the U.S. posts existing home sales.

U.S. numbers impressed late in the week, and the positive news was spread across the economy. The Philly Fed Manufacturing Index jumped to 16.6, up from 8.5 a month earlier. Unemployment claims dropped to 212 thousand, marking a 4-week high. The week ended with a sizzling release from UoM Consumer Sentiment, which climbed to 102.4, its highest level in 15 years.

Brexit has been on the backburner for several weeks, but will be back on center stage in early June. Parliament is expected to vote yet again on a Brexit withdrawal agreement, after three previous attempts by the May government ended in failure. It’s difficult to see why the result will be any different this time around, as Conservative lawmakers remain deeply divided on Brexit. May tried to enlist the help of Labor leader Jeremy Corbyn, but these talks have been unproductive. The next Brexit vote in parliament will be May’s last chance before the summer recess, and her days as prime minister may be numbered.

Australian & Indian Election results provide risk-on flows on mixed Asian open

GBP/USD Fundamentals

Monday (May 20)

  • 9:30 British CB Leading Index. Actual -0.5%
  • 12:30 British MPC Member Broadbent Speaks
  • 13:05 US FOMC Member Clarida Speaks
  • 19:00 US Federal Reserve Chair Powell Speaks

Tuesday (May 21)

  • 4:30 British Inflation Report Hearings
  • 6:00 British CBI Industrial Order Expectations. Estimate -6
  • 10:00 US Existing Home Sales. Estimate 5.35M

*All release times are DST

*Key events are in bold

GBP/USD for Monday, May 20, 2019

GBP/USD May 20 at 10:40 DST

Open: 1.2719 High: 1.2757 Low: 1.2719 Close: 1.2740

GBP/USD Technical

S1 S2 S1 R1 R2 R3
1.2477 1.2615 12723 1.2841 1.2910 1.3000

GBP/USD posted small gains in the Asian session. In European trade, the pair edged higher but then gave up some of these gains. The pair is showing limited movement in the North American session

  • 1.2723 is a weak support level
  • 1.2841 is the next resistance line
  • Current range: 1.2723 to 1.2841

Further levels in both directions:

  • Below: 1.2723, 1.2615 and 1.2477
  • Above: 1.2841, 1.2910, 1.3000 and 1.3070

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

Currency Analyst at Market Pulse
Kenny Fisher joined OANDA in 2012 as a Currency Analyst. Kenny writes a daily column about current economic and political developments affecting the major currency pairs, with a focus on fundamental analysis. Kenny began his career in forex at Bendix Foreign Exchange in Toronto, where he worked as a Corporate Account Manager for over seven years.