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GBP/USD – Pound Coming Off Miserable Week, Falls Below 1.29

Kenny Fisher

GBP/USD is trading quietly in the Monday session. The pair is currently trading at 1.2881, down 0.07% on the day.

Ahead – GDP, Manufacturing Production

After a dismal week, in which the pound fell 2.2%, all eyes are on GDP reports and a key manufacturing release. Strong data could push the pound back towards the 1.30 level.

Preliminary GDP rose 0.3% in Q3, shy of the forecast of 0.4%. Still, this was higher than the Q2 release of -0.2%. The estimate for the fourth quarter stands at a flat 0.0%. The monthly GDP report came in at -0.3% in November, short of the forecast of 0.0%. This indicator has not shown a gain since July, but the forecast for December is 0.2%.

The British manufacturing sector has struggled, and Manufacturing Production has managed only one gain in the past four months. In November, manufacturing production fell by 1.7%, its sharpest decline since April 2019. Analysts expect a rebound to 0.5% in December.

Technical Analysis

GBP/USD remains under pressure. There is weak resistance at 1.2902, followed by resistance at the key level of 1.300. The 50-EMA line follows closely at 1.3012. On the downside, there is pressure on support at 1.2850. Below, The 200-day EMA is situated at 1.2828.

 

Pacific Currencies – Daily Summary

USD/CNY

After showing sharp swings last week, USD/CNY has started the week with losses. Currently, the pair is trading at 6.9816, down 0.27% on the day. There was positive economic news to start the day, as Chinese CPI gained 5.4% in January on an annualized basis, up from 4.5% in December. The forecast stood at 4.9%. The strong numbers were a result of increased consumer demand around the Lunar New Year holiday.

AUD/USD

AUD/USD has started the week with gains. Currently, the pair is trading at 0.6700, up 0.40% on the day. On Friday, the RBA lowered its growth forecasts in its quarterly monetary policy statement. The bank slashed the June 2020 forecast from 2.6% to 1.9%, citing the recent drought, bushfires and the coronavirus as reasons for the lower forecast. The December 2020 forecast was trimmed from 2.8% to 2.7%. There are no Australian events on the calendar. On Tuesday, Australia releases NAB Business Confidence and Westpac Consumer Sentiment.

NZD/USD

It’s been down, down, down for the struggling NZD/USD. The pair slipped close to 1 percent last week, as the coronavirus continues to weigh heavily on risk appetite. Currently, the pair is trading at 0.6407, up 0.07% on the day. There are no New Zealand releases on the schedule.

This article was originally posted on FX Empire

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