Close Preview x  
     
Close x
Expert Advisor Hosting Request

Please provide the following information:
(All Fields Required)

X My Account Secure Account Login Login

Close x
Online Security

Secure login
Ensuring the security of your personal information is of paramount importance to us. When you sign in to the trading platform, your User ID and password are secure.

The moment you click Login, we encrypt your User ID and password using 128-bit Secure Sockets Layer (SSL) technology.

Browser security indicators
You may notice when you are on our website that some familiar indicators do not appear in your browser to confirm the entire page is secure. Those indicators include the small "lock" icon in the bottom right corner of the browser frame and the "s" in the Web address bar (for example, "https").

To provide the fastest access to the trading platforms, we have made signing in to trading platforms secure without making the entire page secure. Again, please be assured that your ID and password are secure.

Close x

We would like to contact you by telephone to help you make the most of your demo account, and inform you about our products and services. By submitting your telephone number you agree that FOREX.com can contact you by telephone.
Submit
 
Privacy policy
Brexit-hit GBP/USD rebounds ahead of UK GDP and US CPI

Updated  Aug 9, 2018 8:53:14 AM Written by Fawad Razaqzada



After a sharp slide, the pound has finally caught a bid today. While it is too early to suggest that a low has been hit, today’s rebound is certainly a welcome relief for the pound bulls.  The GBP/USD has ended a run of five consecutive losses, the GBP/JPY is up after falling six days in a row, while the EUR/GBP is back below 0.90 after a sharp 4-day rally. Sterling’s rebound is therefore mainly because of profit-taking on the short trades that had been accumulated over the past week or so. Clearly some market participants have one eye on upcoming UK data while assessing the damage of a potential no-deal Brexit outcome on the UK economy. The latter is going to be a longer term worry which means any short-term rallies in the pound could be short-lived, as it proved to be the case after the Bank of England’s rate hike last week.  

Will the pound respond better to UK GDP than it did to BoE hike?

On Friday, the ONS will publish the latest growth figures for the UK economy. GDP is expected to have grown in the second quarter by 0.4% following a disappointing expansion of just 0.2% in Q1. The ONS will also publish the monthly GDP estimate at the same time, as well as UK trade figures, manufacturing production, industrial production and construction output. The UK data dump tomorrow morning at 9:30 BST should cause a spike in pound volatility. If the figures are overall weaker than expected then the pound could resume its slide. If the data turn out to be stronger then it will be interesting to see whether the pound bulls will be more determined this time around after the currency’s quick reversal post BoE last week.

US CPI inflation numbers key focus for dollar

As far as the GBP/USD is concerned, there is also the other side of the equation to consider: the US dollar. That’s because we will also have the all-important US consumer inflation numbers in the afternoon which could move the greenback sharply. US CPI is expected to have risen 02% in July, taking the year-over-year rate to 3.0% from 2.9% previously. Core CPI is also see rising 0.2% on the month with year-over-year rate expected to have remained unchanged at 2.3% last month. If inflation turns out to be hotter than expected then this should bode well for the dollar as it will further cement the Fed’s projected rate hike expectations. However, if CPI turns out to be weaker than expected then we could see the dollar take a tumble. This is because we think most of the positively for the dollar might be priced in by now, so it could fall more on data misses than rise on beats.

GBP/USD rebounds from key long-term support zone

From a technical point of view, the cable is currently trading near the lower end of its bearish channel around the long-term 61.8% Fibonacci retracement level just below the 1.29 handle. This implies that the sellers have been in firm control. It also means that there is now scope for a short squeeze rally towards the top of the channel should the bears further reduce their positions ahead of the above fundamental events. The long-term technical outlook would turn bullish when the cable breaks a previous high. In this case, the most recent high is at 1.3175 which is now the line in the sand for us. A couple of short-term resistance levels to watch are around 1.2920/5 and 1.3095/3100, levels which were formerly support. Meanwhile the next potential support below 1.2850 comes in at 1.2750.

Source: TradingView.com and FOREX.com

Disclaimer: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that FOREX.com is not rendering investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. FOREX.com is regulated by the Commodity Futures Trading Commission (CFTC) in the US, by the Financial Services Authority (FCA) in the UK, the Australian Securities and Investment Commission (ASIC) in Australia, and the Financial Services Agency (FSA) in Japan. Please read Characteristics and Risks of Standardized Options.

FOREX.COM TWEETS

Test your trading strategies risk free btn_demo_blue_hover.gif OR btn_open_an_account_dark_grey_alt_hover.gif

Have more questions?

Chat Live Now or call 0800 032 1948