Positive data from the UK shows expansion in consumer spending slowed in the last month. Headline spending grew at the tepid pace of 1.4% and well below the expected 3.0%. This figure not only missed expectations but contracted from the previous month versus an expectation for robust expansion. At the core level sales grew by a smaller 1.3% also missing expectations and contracting from the previous month. The reason is Brexit. While sign of expansion within the UK economy persist consumers remain cautious.
The pound, which has been rising versus the dollar, fell on the news. Although positive and supportive of the broader UK economy the data does little to spur hawkish behavior from the BOE. What it does do is weaken forward BOE outlook as seen in the GBP/USD. The pair is now confirming resistance at the 1.3940 level and entering a period of consolidation ahead of the next central bank meetings. The FOMC meets in 2 weeks, the BOE in 3.
Looking forward traders should expect volatility over the next 3 weeks as data and central bank policy statements hit the market. With most major banks on the cusp of tightening cycles it is likely the dollar will remain under pressure into the long term. The indicators are consistent with consolidation and a possible correction. A fall from this level, driven by news, would be bearish with targets near 1.3800, 1.3700 and 1.3600. A move up past 1.3940 would be bullish.
PPI data in the EU helped the euro hold its ground versus the pound but the pair remains within its near-term trading range. Today’s move indicates support at a higher level, 0.8800, a narrowing of the range as we approach the ECB meeting next week. The bank is expected to begin altering its policy stance and if so, will likely send the euro higher. The risk is that they won’t, or will do too little, and leave the pair range bound or send it lower. Until then look for the pair to move up within the range. Resistance is near the top of the range at 0.8900, a break above there would be bullish.
The pound held steady against the Swiss franc, creating a small doji within a narrowing trading range. This range is near long term highs and a likely point of resistance and reversal assuming no changes from the BOE in 3 weeks’ time.
The indicators are bullish but very weak, consistent with listless range bound action over the past few months. Weak or weakening data from the UK could send the pair down to support, near 1.3200 and the 30 bar EMA, a break below there would be bearish.
3 min
Table of contents
MOST TRADED ASSETS
- Binary Options
- Digital Options
- Forex
- Stocks
- Indices
- Commodities
- ETFs
-
EUR/USD
1.12
Trade+0.1% -
USD/JPY
145.53
Trade-0.78% -
GBP/USD
1.33
Trade+0.34% -
AUD/USD
0.64
Trade-0.35% -
GBP/JPY
193.65
Trade-0.45%
-
Microsoft Corporation
452.03
Trade-0.09% -
Domino's Pizza Inc
486.19
Trade+0.35% -
Tesla, Inc.
342.42
Trade-1.34% -
NVIDIA Corporation
134.44
Trade-1.37% -
Apple Inc.
210.96
Trade-0.47%
-
Gold
3249.97
Trade+2.03% -
Crude Oil WTI
61.25
Trade-0.87% -
Silver
32.67
Trade+1.39% -
Gold-Gram
104.49
Trade+2.03% -
Crude Oil Brent
64.29
Trade-1.47%
-
US 100
21306.98
Trade+0.06% -
US 500
5915.82
Trade+0.62% -
GER 30
23712.45
Trade+1.05% -
US 30
42316.42
Trade+1.14% -
US 2000
2097.02
Trade+0.89%
-
S&P 500 ETF
590.41
Trade+0.74% -
UltraPro Short QQQ
23.66
Trade-1.46% -
Daily Junior Gold Miners Index
62.34
Trade+2.43% -
Gold Miners ETF
46.56
Trade+1.06% -
Bitwise Bitcoin ETF (BITB)
56.15
Trade+0.55%
Your capital might be at risk
Related posts
Short Selling: How to Trade Forex in a Downward Market
Top 20 Most Valued Currencies In The World (And Why They’re Worth So Much)
Forex Technical Analysis: Does It Work?
5 Forex Pairs to Watch in 2024
Forex Trading on IQ Option
3 Popular Forex Trading Strategies
How to Make Sense of the Economic Calendar? Step-by-Step
Best Technical Indicators for Forex Trading
What should you learn next? Turn the wheel to find out!
