GBP/USD remained on the back foot once again, struggling. The upcoming week features three key releases: the inflation report, the jobs report and the retail sales report. Here are the key events and an updated technical analysis for GBP/USD.
House prices moved up for a change, but the overall trend remains to the downside. Consumption is also struggling and so is the UK’s trade balance: the deficit ballooned to 12.7 billion. Manufacturing and industrial output figures were mixed. In the US, another jobs report was positive for the dollar but the inflation figures sent the dollar down.
GBP/USD daily chart with resistance and support lines on it. Click to enlarge:
- Inflation report: Tuesday, 8:30. Inflation surprised to the downside in the report for June. Year over year, price rises decelerated to 2.6%, retreating from the 3% limit. Core CPI stood at 2.4% and the Retail Price Index (RPI) is quite rapid at 3.5%. PPI Input dropped 0.4% m/m and the HPI slowed down to 4.7%.
- CB Leading Index: Tuesday, 13:30. This compound index of 7 indicators dropped by 0.1% in May, adding further evidence of the slowdown.
- Jobs report: Wednesday, 8:30. The Claimant Count Change provides an updated snapshot of the jobs market and it has shown modest rises in the number of the jobless: 6K in June, albeit, better than expected. The focus will probably remain on wages. In May, these rose by 1.8% y/y, falling under 2% after many months above that level. The unemployment rate fell to 4.5%, and this is encouraging. We now get the unemployment rate and wage data for June.
- Retail Sales: Thursday, 8:30. Despite its volatility, the official measure of consumption has a significant impact on the pound. Back in June, consumers surprised as the volume of sales increased by 0.6%. July could see a slide.
GBP/USD Technical Analysis
Technical lines from top to bottom:
1.35 was the post-Brexit high and remains the top level. It is followed by 1.3370 which capped the pair several times in 2016.
The 2017 high (so far) of 1.3270 is the next barrier. 1.3120 served as resistance twice in the summer of 2017 and remains important.
Below, 1.3050 is a double top as seen during the spring of 2017. 1.2975 awaits on the lower side of 1.30.
Further below, 1.2890 separated ranges on the way down. It is followed by 1.2820 and 1.2775.
I remain bearish on GBP/USD
More signs of economic weakness are set to weigh on the pound. Despite the US dollar weakness, Brexit seems worse than Trump.
from Forex Crunch http://feedproxy.google.com/~r/ForexCrunch/~3/rokcv0oy38o/
from Online Forex Trading Resource
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