GBP/USD: outlook for Sep. 12-18
Last week economic data from the United Kingdom were mixed. On the one hand, services PMI showed the biggest gain in 2 decades. On the other hand, manufacturing production, a key indicator, suffered in July from a bigger-than-expected decline of 0.9%.
Britain will release inflation data on Tuesday, labor market figures on Wednesday and retail sales on Thursday. The forecasts are mixed. On Friday the UK won’t attend European Union summit for the first since it joined in 1973.
The Bank of England will meet on Thursday. The regulator is expected to keep the interest rate unchanged taking a “wait-and-see” approach after slashing growth forecasts and increasing monetary stimulus in August. Traders will pay great attention to the meeting minutes to see how the central bank evaluates the UK economy after Brexit vote, given that the nation’s economic figures tend to be better than expected. Last month the BOE signaled a possibility of further monetary easing this year, so it will be interesting to know whether they changed their mind or not. For now, most economists expect British central bank to lower the benchmark rate once again this year. Also don’t forget that the market’s attitude towards the US dollar will also have an impact on the pair.
GBP/USD formed last week a bearish candle with a long upper shadow – a bearish signal. It looks like the pair formed a temporary top at 1.3445. The pair closed on Friday below the important 1.3300 mark and looks vulnerable for decline to 1.3180/50 (bottom of the daily Ichimoku Cloud, 50-day MA). Below this level the next support will be at 1.3085. Resistance is at 1.3375 and 1.3445.