GBP/USD dovetailing into 1.33 as Sterling eyes a thin week
|- Long weekend sees a low volatility Monday for the upcoming London market session.
- Little of note on the economic calendar for the Pound this week ahead of Friday's PMI.
The GBP/USD is trading up softly from last week's close, testing into 1.3325 heading into a quiet Monday.
The UK is on holidays for Monday for the Spring Bank Holiday, pulling a long weekend and giving the new trading week a quiet start.
A quiet week greets the hurting Sterling
It's a quiet week in general for the Sterling, and the first macro release for the UK won't be hitting until late Wednesday at exactly 23:01 GMT with the GFK Consumer Confidence Survey. With the Consumer Survey last printing at -9, confidence within the UK's economy continues to slump, and the Bank of England (BoE), which was recently pulled off of their hawkish perch that had anticipated a May rate hike, has been struggling to develop any real momentum as the GBP, and the UK economy, continue to falter to the weak side, extending the first quarter's 'slight economic downturn' further south than expected.
As FXStreet's own Mario Blaschak noted on the GBP's outlook heading into this week, "the macro picture in the UK is framed by two important trends, slowing economic growth and decelerating inflation. The UK inflation is approaching the Bank of England 2% inflation target faster than originally predicted in support of the real, inflation-adjusted wages while the economic growth is almost stagnant in the first quarter of this year. Both measures though support the argument of the Bank of England staying pat on the Bank rate with the market forecasting 0.25% Bank rate hike in February on 2019 based on effective money market rates."
GBP/USD levels to watch
Valeria Bednarik, FXStreet's Chief Analyst, on the GBP/USD's technical stance heading into a quiet Monday session: "the UK will kick start the week with a bank holiday, and the local macroeconomic calendar has little to offer until Friday, with the release of May preliminary Markit manufacturing PMI, expected at 53.6 from the previous 53.9. The daily chart for the pair shows that, after a period of consolidation at the beginning of the month, it resumed its bearish trend that has not yet found a bottom, as technical indicators accelerated their slides, with the Momentum easing modestly, but at fresh 2-week lows, and the RSI heading south around 21. Shorter term, and according to the 4 hours chart, the pair is also biased lower, with a bearish 20 SMA providing a dynamic resistance at 1.3365 and technical indicators leaned lower, the Momentum without directional strength but the RSI accelerating lower and supporting further slides ahead."
Support levels: 1.3280 1.3245 1.3210
Resistance levels: 1.3320 1.3365 1.3400
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