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GBP/USD Forecast July 17-21

By Kurt Osterberg · On July 16, 2017

GBP/USD reversed directions last week, gaining 200 points. The pair closed at the 1.31 line. This week’s highlights are CPI and Retail Sales. Here is an outlook for the highlights of this week and an updated technical analysis for GBP/USD.

In the UK, Brexit jitters increased as all three PMIs reported softer growth in May and missed estimates. The latest political scandal involving Donald Trump Jr. has hurt the dollar, and Yellen’s concern about low inflation also weighed on the greenback.

Updates:

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

Rightmove HPI: Sunday, 23:01. This indicator is a gauge of activity in the housing sector. The June reading of -0.4% was the first decline in 2017. Will we see a gain in the July report?

CPI: Tuesday, 8:30. CPI is one of the most important indicators and should be treated as a market-mover. Inflation continues to rise and climbed to 2.9% in May, beating the estimate of 2.7%. Another gain of 2.9% is expected in June.

PPI Input: Tuesday, 8:30. This indicator measures inflation in goods and services purchased by manufacturers. In May, the index declined 1.3%, worse than the forecast of -0.5%. Another decline is expected in June, with an estimate of -0.8%.

RPI: Tuesday, 8:30. RPI is similar to CPI but excludes housing costs. The index continues to climb, and hit 3.9% in May, above the estimate of 3.7%. The forecast for June is 3.6%.

BoE Governor Mark Carney Speaks: Tuesday, 13:30. Carney will speak at an event in Hampshire. The markets will be looking for clues regarding future rate hikes.

Retail Sales: Thursday, 8:30. This is the primary gauge of consumer spending. In May, the indicator declined 1.2%, missing the estimate of -0.9%. The markets are expecting a rebound in June, with an estimate of 0.3%.

Public Sector Net Borrowing: Friday, 8:30. The UK deficit narrowed to GBP 6.0 billion in May, smaller than the estimate of GBP 7.3 billion. The deficit is expected to continue to shrink in June, with an estimate of GBP 4.3 billion.