is showing limited movement in the Monday session. In North American trade, the pair is trading just under the 1.29 line. On the release front, there are no major events on the schedule.
The British economy has managed quite well since the Brexit vote in June 2016, but last week’s PMIs may signal the much-feared economic downturn. PMIs in the , and sectors all pointed to slower growth in June, compared to the May readings. The double whammy of the British election and the start of Brexit talks with Europe have increased uncertainty and resulted in a decrease in new orders across the economy.
The BoE is divided over whether to raise in the next few months, and the public disagreements between BoE policy makers over rate policy will not help investor confidence. The May government has a razor-thin majority, and must negotiate a divorce with an angry European Union that does not want to see other members opt to leave the club. The UK will release key employment numbers on Wednesday, with wage growth and claims expected to worsen in June.
The US wrapped up last week with key employment numbers, and the data was mixed. rebounded in June, climbing to 222 thousand. This easily beat the estimate of 175 thousand and marked a 4-month high. However, wage growth remains soft, as was unchanged at 0.2%, shy of the forecast of 0.3%.
Weak wage growth has remained soft throughout the first half of 2017, despite a tight labor market. With wages remaining stagnant, inflation is also mired at low levels. If inflation does not improve, the Federal Reserve may have second thoughts about a in December. Currently, the odds of an increase in December have dipped to 47%, as the markets clearly have their doubts that the Fed will press the rate trigger.
Monday (July 10)
- 10:00 US Labor Market Conditions Index. Actual 1.5
- 15:00 US Consumer Credit. Estimate 12.1B
- 19:01 British BRC Retail Sales Monitor
*All release times are EDT
*Key events are in bold
GBP/USD for Monday, July 10, 2017
GBP/USD July 10 at 12:10 EDT
Open: 1.2887 High: 1.2909 Low: 1.2855 Close: 1.2890
- GBP/USD inched higher in the Asian session. The pair posted slight losses in the European session and is steady in North American trade
- 1.2865 was tested earlier in support and is a weak line
- 1.2946 is the next resistance line
Further levels in both directions:
- Below: 1.2865, 1,.2706 and 1.2571
- Above: 1.2946, 1.3058, 1.3121 and 1.3279
- Current range: 1.2865 to 1.2946
OANDA’s Open Positions Ratio
In the Monday session, GBP/USD ratio is showing short positions with a majority (61%). This is indicative of trader bias towards GBP/USD breaking out and moving lower.