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GBP/USD Forecast July 10-14

By Kurt Osterberg · On July 9, 2017

GBP/USD reversed directions last week, losing 130 points. The pair closed at 1.2884. This week’s highlights are Average Earnings Index and Claimant Count Change. 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. In the US, the Federal Reserve minutes pointed to division over the timing of the balance sheet reduction and concerns about low inflation. There was mixed news on the employment front, as Nonfarm Payrolls rebounded to 222 thousand, but wage growth remained weak.

Updates:

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

BRC Retail Sales Monitor: Monday, 23:01. This retail sales indicator has struggled, with four declines in the past five months. In May, the indicator posted a decline of -0.4%.

MPC Member Ande Haldane Speaks: Tuesday, 10:00. Haldane will participate in a panel at a BoE event in London. A speech that is more hawkish than expected is bullish for the pound.

MPC Member Ben Broadbent Speaks: Tuesday, 11:00. Broadbent will speak at an event in Aberdeen. The markets will be looking for clues regarding the BoE’s future monetary policy.

CB Leading Index: Tuesday, 13:30. The indicator has posted two straight declines. Will the index bounce back in the May report?

Average Earnings Index: Wednesday, 8:30. Wage growth softened to 2.1% in April, short of the forecast of 2.4%. The downward trend is expected to continue in May, with an estimate of 1.8%.

Claimant Count Change: Wednesday, 8:30. This indicator should be treated as a market-mover. In May, the indicator came in at 7.3 thousand, better than the forecast of 12.5 thousand. The estimate for June stands at 10.4 thousand. The unemployment rate is expected to remain at 4.6%.

RICS House Price Balance: Wednesday, 23:01. The indicator continues to weaken, and came in 17% in May, shy of the estimate of 20%. The downward forecast is expected to continue in June, with an estimate of 15%.

BoE Credit Conditions Survey: Thursday, 8:30. Credit levels are carefully monitored, as they are closely linked to spending levels. The quarterly report provides details about secured and unsecured lending to the private sector.