0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bearish
Oil - US Crude
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Bullish
Gold
Bearish
GBP/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • $AUDUSD just weakened slightly following disappointing Chinese industrial production and retail sales data What is the Aussie facing over the next 24 hours and heading into next week? #AUD https://www.dailyfx.com/forex/market_alert/2020/08/14/Australian-Dollar-Outlook-Eyes-SP-500-Retail-Sales-After-Chinese-Data.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/b9pmxMkp8o
  • 🇨🇳 Unemployment Rate (JUL) Actual: 5.7% Previous: 5.7% https://www.dailyfx.com/economic-calendar#2020-08-14
  • 🇨🇳 Fixed Asset Investment (YTD) YoY (JUL) Actual: -1.6% Expected: -1.6% Previous: -3.1% https://www.dailyfx.com/economic-calendar#2020-08-14
  • 🇨🇳 Industrial Production YoY (JUL) Actual: 4.8% Expected: 5.1% Previous: 4.8% https://www.dailyfx.com/economic-calendar#2020-08-14
  • 🇨🇳 Retail Sales YoY (JUL) Actual: -1.1% Expected: 0.1% Previous: -1.8% https://www.dailyfx.com/economic-calendar#2020-08-14
  • Heads Up:🇨🇳 Unemployment Rate (JUL) due at 02:00 GMT (15min) Previous: 5.7% https://www.dailyfx.com/economic-calendar#2020-08-14
  • Heads Up:🇨🇳 Fixed Asset Investment (YTD) YoY (JUL) due at 02:00 GMT (15min) Expected: -1.6% Previous: -3.1% https://www.dailyfx.com/economic-calendar#2020-08-14
  • Heads Up:🇨🇳 Industrial Production YoY (JUL) due at 02:00 GMT (15min) Expected: 5.1% Previous: 4.8% https://www.dailyfx.com/economic-calendar#2020-08-14
  • Heads Up:🇨🇳 Retail Sales YoY (JUL) due at 02:00 GMT (15min) Expected: 0.1% Previous: -1.8% https://www.dailyfx.com/economic-calendar#2020-08-14
  • Heads Up:🇨🇳 NBS Press Conference due at 02:00 GMT (15min) https://www.dailyfx.com/economic-calendar#2020-08-14
GBP/USD Forecast: Rebound Vulnerable to Stagnant U.K. Wage Growth

GBP/USD Forecast: Rebound Vulnerable to Stagnant U.K. Wage Growth

2018-07-16 15:30:00
David Song, Strategist
Share:

British Pound Talking Points

GBP/USD appears to be stuck in a narrow range amid the uncertainty surrounding Brexit proposal, and fresh data prints coming out of the U.K. economy may continue to sap the appeal of the British Pound as the updates to the employment report are anticipated to show a mixed outlook the labor market.

Image of daily change for major currencies

GBP/USD Forecast: Rebound Vulnerable to Stagnant U.K. Wage Growth

Image of daily change for GBPUSD

Even though U.K. job growth is projected to increase another 115K during the three-months through May, Average Weekly Earnings are supposed to hold steady at 2.5% per annum, while Average Weekly Earnings excluding bonuses are expected to narrow to 2.7% from 2.8%.

Signs of stagnant wage growth is likely to drag on the British Pound as it encourages the Bank of England (BoE) to delay its hiking-cycle, and the majority of the BoE may vote in favor of keeping the benchmark interest rate on hold at the next meeting on August 2 as especially as ‘inflation continued to fall back gradually as the effects of sterling’s past depreciation faded.’

As a result, the U.K. Consumer Price Index (CPI) on tap for later this week may also impact the pound-dollar exchange rate as the core rate of inflation is expected to hold steady at 2.1% per annum in June, and a batch of lackluster data prints may rattle the recent rebound in GBP/USD as it dampens bets for an imminent BoE rate-hike.

Image of IG Client Sentiment for GBPUSD

Keep in mind, the IG Client Sentimentreport shows retail traders have remained net-longsince April 20 when GBP/USD traded near the 1.4090 zone even though price has moved 6.1% lower since then. In addition, 67.4% of traders are still net-long as the ratio of traders long to short sits at 2.06 to 1, but market interest appears to be waning ahead of the key U.K. data prints as the number of traders net-long is 2.9% lower than yesterday and 7.8% lower from last week, while the number of traders net-short is 9.4% lower than yesterday and 9.3% lower from last week.

With that said, the broader outlook for GBP/USD remains tilted to the downside especially as the Relative Strength Index (RSI) continues to track the bearish formation from earlier this year, but the exchange rate stands at risk of facing range-bound conditions as it snaps the series of lower highs & lows from the previous week.

GBP/USD Daily Chart

Image of GBPUSD daily chart
  • Monthly range remains in focus for GBP/USD followed the failed attempt to test the June-high (1.3473), with the near-term outlook capped by the 1.3370 (78.6% expansion) hurdle.
  • Lack of momentum to retain the recent series of lower highs & lows may continue to foster range-bound conditions, with the 1.3090 (38.2% retracement) region on the radar as it largely lines up with the monthly-low (1.3095).
  • Need a break/close below the stated region to bring the downside targets back on the radar, with the first region of interest coming in around 1.2950 (23.6% expansion) followed by the 1.2800 (50% expansion) handle.

For more in-depth analysis, check out the Q3 Forecast for the British Pound

Interested in having a broader discussion on current market themes? Sign up and join DailyFX Currency Analyst David Song LIVE for an opportunity to discuss potential trade setups!

Image of DailyFX economic calendar

Additional Trading Resources

Are you looking to improve your trading approach? Review the ‘Traits of a Successful Trader’ series on how to effectively use leverage along with other best practices that any trader can follow.

Want to know what other currency pairs the DailyFX team is watching? Download and review the Top Trading Opportunities for 2018.

--- Written by David Song, Currency Analyst

Follow me on Twitter at @DavidJSong.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.