The British pound has posted considerable losses in the Tuesday session. In North American trade, the pair is trading at 1.3160, down 0.57% on the day. On the release front, British employment numbers disappointed the markets. Wage growth remained pegged at 2.5%, matching the estimate. Unemployment rolls expanded by 7.8 thousand, higher than the estimate of 2.3 thousand. There are no major U.S indicators. In the U.S, Federal Reserve Chair Jerome Powell testifies before the Senate Banking Committee.
After a soft first quarter, U.S retail sales reports have rebounded in the second quarter. Core retail sales were revised upwards to 0.8% in May, and the June gain of 0.5% edged above the forecast of 0.4%. Retail sales gained 0.4%, and were up an impressive 6.6% on an annualized basis. Consumer spending is a key driver of economic growth, and a tight labor markets and firming inflation are further indications that the economy is in excellent shape. The Fed is widely expected to raise rates again at the September meeting, with odds of a quarter-point hike at 87%, according to the CME Group.
The trade war between the U.S and China is raising concerns not just on the equity markets but at the Federal Reserve as well. On Friday, Dallas Fed President Robert Kaplan said he would have to downgrade his economic outlook for the economy if the tariff battle continues. Kaplan said that U.S tariffs on steel and aluminum imports had dampened capital expenditures plans and further trade tensions could lead to currency fluctuations and geopolitical instability.
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GBP/USD Fundamentals
Tuesday (July 17)
- 4:00 BoE Governor Mark Carney Speaks
- 4:30 British Average Earnings Index. Estimate 2.5%. Actual 2.5%
- 4:30 British Claimant Count Change. Estimate 2.3K. Actual 7.8K
- 4:30 British Unemployment Rate. Estimate 4.2%. Actual 4.2%
- Tentative – British NIESR GDP Estimate
- 9:15 US Capacity Utilization Rate. Estimate 78.4%. Actual 78.0
- 9:15 US Industrial Production. Estimate 0.5%. Actual 0.6%
- 10:00 US Federal Reserve Jerome Powell Testifies
- 10:00 US NAHB Housing Market Index. Estimate 69. Actual 72
- 16:00 US TIC Long-Term Purchases. Estimate 34.3B
*All release times are DST
*Key events are in bold
GBP/USD for Tuesday, July 17, 2018
GBP/USD July 13 at 10:40 DST
Open: 1.3235 High: 1.3269 Low: 1.3145 Close: 1.3160
GBP/USD Technical
| S1 | S2 | S1 | R1 | R2 | R3 |
| 1.2852 | 1.2996 | 1.3088 | 1.3186 | 1.3263 | 1.3494 |
GBP/USD showed little movement in the Asian session. The pair posted considerable losses in European trade and is flat in North American trade
- 1.3088 is providing support
- 1.3186 has switched to a resistance role after losses by GBP/USD on Tuesday. It is a weak line
- Current range: 1.3088 to 1.3186
Further levels in both directions:
- Below: 1.3088 and 1.2996 and 1.2852
- Above: 1.3186, 1.3263, 1.3494 and 1.3613
