GBP/USD – British pound lethargic in post-holiday session

Kenny Fisher MarketPulse

GBP/USD has posted slight losses in the Tuesday session. In North American trade, GBP/USD is trading at 1.2953, down 0.21% on the day. On the release front, there are no British events. In the U.S., the House Price index slowed to 0.3%, shy of the estimate of 0.6%. Later in the day, the U.S. releases new home sales and the Richmond manufacturing index. On Tuesday, the U.K. releases public sector net borrowing.

British lawmakers return to work on Tuesday after a short break, and it’s a safe bet that Brexit will be high on the agenda. However, there is another departure date being discussed besides Britain leaving the EU. Some Conservative MPs plan to tell Prime Minister May to name her exit date, or else she will be ousted in June. May has been unable to pass the withdrawal agreement through a divided parliament, and her days could be numbered at 10 Downing Street.

While the currency markets have been listless during Easter week, oil prices have jumped. Crude has jumped to a 5-month high after the Trump administration announced that it would terminate sanction waivers given to some importers of Iranian oil, as of May 1. This move is intended to further tighten sanctions against Iran and cripple Iranian oil exports. The move has been bitterly criticized by Iran, which has upped the ante by threatening to close the Strait of Hormuz, a critical gateway for seaborne oil shipments. The rising geopolitical temperature could further boost oil prices, which are up 50% since December. Higher oil prices could weigh on economic growth and send nervous investors to the safety of the U.S. dollar.

US sparks Asia oil rush

Is the dovish policy swivel from G7 CB’s the right move?

GBP/USD Fundamentals

Tuesday (April 23)

9:00 US HPI. Estimate 0.6%
10:00 US New Home Sales. Estimate 647K
10:00 US Richmond Manufacturing Index. Estimate 10

Wednesday (April 24)

4:30 British Public Sector Net Borrowing. Estimate -0.8B

Open: 1.2981 High: 1.3019 Low: 1.2945 Close: 1.2953

GBP/USD Technical

GBP/USD was flat in the Asian session and has edged higher in European trade. The pair has dropped considerably early in North American trade

1.2910 is providing support
1.3070 is the next resistance line
Current range: 1.2910 to 1.3070

Further levels in both directions:

Below: 1.2910, 1.2841 and 1.2729
Above: 1.3070, 1.3170, 1.3258 and 1.3362

Author

Kenny Fisher

MarketPulse

A highly experienced financial market analyst with a focus on fundamental analysis, Kenneth Fisher’s daily commentary covers a broad range of markets including forex, equities and commodities.

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