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.

Free Trading Guides
EUR/USD
Bullish
Oil - US Crude
Mixed
Wall Street
Bullish
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
Gold
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
GBP/USD
Mixed
USD/JPY
Bullish
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
  • López Obrador hopes #USMCA will help tighten trade relationships between the US and Mexico. Get your currencies market update from @HathornSabin here: https://t.co/bZrUKSCGaS https://t.co/MZ7UoiWWRj
  • The $AUD may suffer as relations between Australia and China deteriorate amid dwindling growth prospects. Euro traders will be closely watching progress in talks about a €500b recovery fund proposal. Get your market update from @ZabelinDimitri here: https://t.co/LkEFJViPWY https://t.co/sofO135ElG
  • The US Dollar could rise against #ASEAN currencies such as the Singapore Dollar as US-China tensions seem to escalate. The Indian Rupee is also looking ahead of local 1Q GDP data. Get your ASEAN currencies market update from @ddubrovskyFX here:https://t.co/LkEFJViPWY https://t.co/ZGFaQQ3Hr2
  • The #Euro is the big driver here for DXY as it is 57% of the index. It is rising now and trying to break above the March 27 high at 11147. Get your $EURUSD technical analysis from @PaulRobinsonFX here:https://t.co/6gt3F9LuGP https://t.co/73SaL5AeXD
  • U.S. Market Analyst at https://t.co/JsVsSmefgR, Shain Vernier covers - ✔️ Safe haven assets in volatile markets ✔️ Central banks and governments ✔️ How will commodities trade in a recession Only on Trading Global Markets Decoded #podcast. Tune in here: https://t.co/1UmEzEbwiy https://t.co/EIC9YqfTec
  • Anybody else think that casting directors in movies are some of the most underrated people when it comes to giving a film/series credit?
  • No https://t.co/EoBltaP17k
  • Crude #oilprices may face heightened liquidation pressure as the cycle-sensitive #commodity finds itself under the pressure of resilient resistance and a vulnerable, multi-week rising channel. Get your crude #oil market update from @ZabelinDimitri here: https://t.co/cGPX4qcOH1 https://t.co/0U4JMJVFuf
  • The @ecb will likely boost its Pandemic Emergency Purchase Program at Thursday’s meeting of its Governing Council; a move that could give the #Euro a lift. Get your currencies market update from @MartinSEssex here: https://t.co/I4PbmJNG1z https://t.co/hu6Ld1KdDB
  • $GBPUSD doesn’t have the cleanest set of technical indications, but #USD may give indications if it can break its trading range via the $DXY. Get your currencies market update from @PaulRobinsonFX here: https://t.co/PrC9wAaXvU https://t.co/vHYHflwqR3
GBP Weak Ahead of Data Deluge and Heightened UK Political Risks

GBP Weak Ahead of Data Deluge and Heightened UK Political Risks

2017-08-14 12:49:00
Nick Cawley, Strategist
Share:

Talking Points

- Data and political risk cap any GBP upside for the time being with the next few days key.

- Retail traders remain short GBPUSD but outlook remains mixed.

Check out our new Trading Guides: they’re free and have been updated for the third quarter of 2017

Sterling volatility is likely to ramp up over the next few days as a raft of highly significant UK data prints are released that will give investors a much better insight into how the UK economy is faring as it prepares to leave the European Union. And the release this week of the first of up to 12 official UK Brexit position papers may well trump the data deluge.

The latest UK inflation numbers are set to be released on Tuesday, August 15, and will provide a clear pointer towards the timing of the next move in UK interest rates. Inflation numbers for July are expected to nudge a fraction higher from last month’s levels – CPIH to 2.7% from 2.6%/Core CPI to 2.5% from 2.4% - providing the hawks on the MPC with further fuel for a rate hike this year. However with UK growth currently stuck in a rut at just 0.3%, the central bank will have to tread very carefully before ceding to the hawk’s demands in case they stifle any potential economic growth in the second half of the year.

I will be covering the UK Inflation Report Live tomorrow from 09.15 am. Please join me here.

On Wednesday, the latest labour market report is likely to see average earnings unchanged around 2%, leaving UK consumers further out of pocket. The unemployment rate is expected to be unchanged at 4.5% and despite being at a 40-year+ low, it is unlikely to feed through into wage inflation and will buoy the doves on the MPC to keep rates lower for longer.

DailyFX analyst and editor @MartinSEssex will be discussing the jobs data live. You can join him here.

Chart: GBPUSD Daily Timeframe (April – August 14, 2017)

GBP Weak Ahead of Data Deluge and Heightened UK Political Risks

Chart by IG

And it looks as though Brexit volatility is likely to increase as the UK government commences publishing up to 12 official Brexit position papers, from as early as Tuesday, August 15. In response to EU commentary that the UK is not fully prepared for leaving the EU, the UK government will outline their position on a number of potential divorce flashpoints, including the N Ireland border issue and the highly-charged ‘exit bill’ from the EU.

I covered all the upcoming data and releases in last Friday’s UK Week Ahead Webinar

Adding to the mixed outlook for GBP, the latest IG Retail Sentiment data shows that while investors remain short of GBPUSD, recent changes in net-positioning over the last day and week give muddy the outlook. Retail trader data shows 46.1% of traders are net-long with the ratio of traders short to long at 1.17 to 1. The number of traders net-long is 6.6% higher than yesterday and 9.9% higher from last week, while the number of traders net-short is 8.8% higher than yesterday and 6.3% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBPUSD prices may continue to rise. Positioning is more net-short than yesterday but less net-short from last week. The combination of current sentiment and recent changes gives us a further mixed GBPUSD trading bias.

For the latest IG Client Sentiment indicators, click here

--- Written by Nick Cawley, Analyst

To contact Nick, email him at nicholas.cawley@ig.com

Follow Nick on Twitter @nickcawley1

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

DISCLOSURES

News & Analysis at your fingertips.