GBP/USD Forecast Jan. 11-15 – Pound Slips On Mixed PMIs

 

Coins, Banknotes, Money, Currency, Finance, Cash

GBP/USD posted considerable losses, erasing the gains seen the week before. The upcoming week has four releases, including GDP. Here is an outlook for the highlights and an updated technical analysis for GBP/USD.

UK PMIs were a mixed bag in December. Manufacturing remains strong, as the PMI accelerated to 57.5, up from 55.6 beforehand. This was the highest level since November 2017. Services PMI has slipped into contraction territory and came in at 49.4, below the neutral 50-level. Construction also remains in expansionary territory and came in at 54.6 points.

In the US, ISM PMIs reports pointed to accelerated expansion in December. Manufacturing PMI improved to 60.7, up from 57.5 beforehand. This beat expectations and was the highest reading since August 2018. Services PMI climbed to 57.2, up from 55.9 beforehand. This exceeded the estimate of 54.5 points.

Nonfarm payrolls was a disaster, as the economy shed 140,000 jobs. The consensus estimate called for a gain of 60,000. There was better news from wage growth, which jumped 0.8%, up from 0.3% a month earlier. This was the strongest gain since April.

GBP/USD daily graph with resistance and support lines on it. Click to enlarge:

  1. BRC Retail Sales Monitor: Tuesday, 00:01. This indicator looks at retail sales in BRC shops. In November, the indicator rose to 7.7%, its highest level in five months. The estimate for December stands at 5.9%.
  2. RICS House Price Balance: Thursday, 00:01. The index has shown strong improvement in recent months, pointing to a stronger housing market. The upcoming estimate is that 61% of reported surveyors will report an increase in house prices.
  3. GDP: Friday, 7:00. The monthly GDP report has been falling and came in at just 0.4% in October. Analysts are braced for a sharp contraction of 4.6% in November.
  4. Manufacturing Production: Friday, 7:00. The manufacturing sector remains strong and Manufacturing Production climbed to 1.7% in October, up from 0.2% beforehand. Another strong reading is projected for November, with a forecast of 1.0%.
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