GBPUSD news - page 98
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GBP/USD forecast for the week of August 8, 2016
The British pound initially tried to rally during the course of the week, but turn right back around to form a bit of a shooting star. By doing so, it looks as if the markets are going to continue to be negative in every time we rally it’s likely that the market will continue to find resistance that we can start falling apart on. Because of this, I’m looking for selling opportunities but I am actually looking for them on short-term charts, as I believe there is far too much support just below to try to hang onto a longer-term selling position.
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UK Trade Deficit Expands Above F'cast in June
Britain's trade deficit with the rest of the world widened in June, data showed on Tuesday, further signaling the country's failure to rebalance the economy towards exports.
The UK's total trade deficit in goods and services booked £5.08 billion during the sixth month of the year, up from the upwardly revised £4.22 billion snatched in May.
Back then, the gauge unexpectedly widened, which could be explained by deteriorating exports versus imports, as the pound depreciated after the Brexit vote.
July 2016 UK NIESR GDP estimate 0.3% vs 0.4% exp
July 2016 UK NIESR GDP rolling quarterly estimate 9 August 2016
UK mortgage borrowers weren't scared off by Brexit in June
June data from the Council of Mortgage Lenders shows a jump in the Brexit month
Q2 data
GBPUSD back below 1.3000 but dip demand expected again
GBPUSD has now popped back down through 1.3000 as sellers prevail 11 Aug
New Asian/session lows of 1.2995 as Europe starts to shuffle in.
Bids/support around 1.2980 with larger strong demand into 1.2950 still lurking should we dip lower. Sellers can now be expected into 1.3020 again with stronger interest at 1.3050.
Yesterday I highlighted the strong offers around 1.3100 and with a high of 1.3194 I hope a few of you were able to take advantage.
EURGBP still underpinned but decent offers at 0.8600 capping so far and that's adding to the cable dip demand. Currently 0.8589
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June 2016 UK construction output -0.9% vs -1.0% exp m/m
June 2016 UK construction output data report 12 August 2016
Not as bad as feared but this is for June so probably only caught the trail end of the month after the Brexit vote. I don't often read much into the monthly numbers as they can be quite volatile. That's completely different in the year on year numbers which has shown how construction has been falling since the 2014 highs. That's not Brexit related but a deeper underlying trend that the UK has seen prior to the vote.
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GBP/USD forecast for the week of August 15, 2016
The GBP/USD pair fell during the course of the week, as we continue to chip away at the barrier below. I believe that the 1.28 level is the bottom of the support and should continue to push this market to the upside until we break down below it. Once we do, I feel that we will then reach down to the 1.25 level. Rallies of this point in time will be selling opportunities, and quite frankly I can’t even come up with that scenario in which I want to buy this pair.
GBP/USD Weekly Outlook August 15-19
GBP/USD has traded heavy since the August 4 BoE meeting. The pair has posted declines in seven out of the past eight trading days, with the single day of gains closing higher a mere 13 points. On a weekly chart, the pair has posted a second consecutive week of declines, and has closed below the prior weekly closes in July, marking the lowest weekly close since 1985.
The pair trades heavy as compared to its counterparts, on Friday, US retail sales sent the US Dollar sharply lower as the figure fell short of expectations. The decline in the Greenback, however, was not sustained and a reversal was seen in most of the majors. GBP/USD was the only pair to break to new weekly lows as a result of the reversal.
Positioning in the Pound Sterling is at record levels as indicated by the COT report. Non-commercials build their net short position by $432mn to a total of $7.32bn, reflecting the sixth consecutive weekly build in the currency. The data was reported on August 12, and is accurate for the week to August 9.
The price action the GBP/USD does not necessarily reflect an extremely bearish currency as the pair remains above its 6-week low. The pair had spiked to a low of 1.2789 on July 6, and posted a recovery to a high of 1.3480. The 690 point recovery puts some emphasis to the July lows, and suggests that the lows will offer some support in the week ahead.
The bearish price action seen in the GBP/USD was triggered by the Bank of England meeting on August 4. The bank followed through with easing measures, showing their commitment to supporting the economy following the UK vote. The bank also assured markets that they would be ready to act further. The next monetary policy meeting is scheduled on September 15, but data this week can provide insight on how the bank will act at their next meeting.
The BoE have stated that the easing measures implemented at their August 4 meeting can stand to move inflation above their targeted mandate in the near-term, while the sharp drop in the exchange rate will also tend to lift inflation. Inflation data is scheduled for release on Tuesday, and will reflect data in the time period following the vote. Markets will be watching the data closely as a higher reading could introduce complication for further easing measures at the next meeting, while a lower reading would open up the doors for further easing. The data event is likely to cause more volatility at this reading than it normally would because of the direct connection to upcoming easing decisions. Data in the upcoming week will tend to impact the pair more than prior data, as the new data reflects a time period following the UK vote and will start to provide an accurate assessment of the economy.
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UK data - Rightmove house prices (August): -1.2% m/m and +4.1% y/y
For the m/m, down 1.2% (vs. previous -0.9%)
Pound jumps vs. dollar as U.K. import prices surge
Sterling jumps vs. dollar as U.K. import prices surge
The pound hit a high of $1.2294. It was up 0.75% at $1.2976 at 05:00 ET after low of $1.2878.
The U.K. PPI input jumped 4.3% year-on-year in July, over double the forecast.
Producer import prices were expected to climb an annual 2.0% last month.
Consumer price inflation was slightly above forecast at up 0.6% month-on-month.