GBP/USD – Pound flat, U.S. consumer confidence shines

The pound is showing little movement in Tuesday trade. Currently, GBP/USD is trading at 1.2679, down 0.02% on the day. On the release front, there are no major British events. In the U.S., CB consumer confidence improved to 134.1 points.

The U.S. consumer remains very optimistic about the economy, according to the latest CB consumer confidence index. The index jumped to 134.1 in May, up from 129.2 in the April release. This score easily beat the estimate of 130.1 and is close to 18-year highs. Retail sales were soft in April, but the sharp improvement in consumer confidence has raised hopes that retail sales data will improve in May.

The European parliament elections have shaken up the political landscape across the continent, as populist and nationalist parties made strong gains at the expense of the center-right and center-left mainstream parties. The U.K. also participated in the elections, and the Brexit Party easily won the day, capturing 29 seats. Labor came in second place with 10, and the Conservatives won just 4 seats.  The election results were a resounding backlash against the mainstream parties for their handling of Brexit, which has dragged on past the original deadline, with no solution in sight. For investors, the worst-case scenario is a no-deal exit, which could undermine the economy and send the British pound sharply lower. Unless May can pull a Brexit rabbit out of her hat, it will be up to her replacement, as yet unknown, to try and hammer out a withdrawal deal with Brussels.

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GBP/USD Fundamentals

Tuesday (May 28)

  • 4:30 British High Street Lending. Estimate 39.3K. Actual 43.0K
  • 9:00 US HPI. Estimate 0.2%. Actual 0.1%
  • 9:00 US S&P/CS Composite-20 HPI. Estimate 3.1%. Actual 2.7%
  • 10:00 US CB Consumer Confidence. Estimate 130.1. Actual 134.1
  • 19:01 British BRC Shop Price Index

*All release times are DST

*Key events are in bold

GBP/USD for Tuesday, May 28, 2019

GBP/USD May 28 at 10:30 DST

Open: 1.2680 High: 1.2702 Low: 1.2654 Close: 1.2679

GBP/USD Technical

S1 S2 S1 R1 R2 R3
1.2401 1.2477 12615 1.2723 1.2841 1.2910

GBP/USD was flat for most of the Asian session. The pair showed stronger movement in European trade but was unable to consolidate any gains. GDP/USD has posted small gains in the North American session

  • 1.2615 is providing support
  • 1.2723 is the next resistance line
  • Current range: 1.2615 to 1.2723

Further levels in both directions:

  • Below: 1.2615, 1.2477 and 1.2401
  • Above: 1.2723, 1.2841, 1.2910 and 1.3000

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.