GBP/USD is drifting in Friday trade. With an abbreviated trading day in the U.S., I expect the lack of movement to continue until next week. Early in the European session, the pair is trading at 1.2909, unchanged on the day. There are no major events on the calendar.
British Consumers Remain Pessimistic
With the Brexit cloud hanging heavy over the U.K, and with the country headed to a snap general election in two weeks, uncertainty and pessimism continue to grip the British consumer. GfK Consumer Index was unchanged at -14 pts, matching its weakest level in 2019. The index has been in (negative) double digits throughout the year, pointing to pessimism. This has had a negative impact on consumer spending, which is a major driver of the economy. In October, retail sales, the primary gauge of consumer spending, declined 0.1 percent. Retail sales has failed to post gains in three months – if this trend continues, the pound could respond with losses.
It has been a week of swings for GBP/USD, as the pair has had trouble finding its footing and establishing a trend. The pair moved close to the symbolic 1.3000 level on Thursday, but then retreated and is currently at the 1.29 level. On the upside, there is strong pressure on resistance at 1.2925, followed by the 1.3000 line. On the downside, we find support at 1.2830, followed by the 1.2770 Below, we have the 50-EMA line at 1.2748.
Pacific Currencies – Summary
USD/CNY is currently trading at 7.0272, down 0.11% on the day. The pair has had a quiet week, but there are developments on the technical side that are worth noting. The line of 7.0400 is under pressure but continues to put up stubborn resistance. Note that the 50-EMA line follows close by, at 7.0446. If the pair can break above the 50-EMA, it has some room to move upwards.
Australian numbers on Friday were soft, but it seems that the post-Thanksgiving hangover in the United States gave the Aussie a free pass. AUD/USD has posted small gains, trading at 0.6777, up 0.14% on the day.
On the fundamental front, Private Sector Credit ticked down to 0.1% in October, down from 0.2% a month earlier. This missed the estimate of 0.3%. Interestingly, the indicator has failed to beat the estimate since August 2018. There was also disappointing news on the housing front. HIA New Home Sales declined 0.5%, after posting back-to-back gains.
NZD/USD has posted slight gains on Friday, and looks poised to close the trading week in positive territory. Currently, the pair is trading at 0.6429, up 0.107. The construction sector took a hit in October, as Building Consents declined by 1.1%, marking a 3-month low.
This article was originally posted on FX Empire
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