GBP/USD continues to have a quiet week. In early European trading, the pair is trading at 1.2834, down 0.25% on the day.
U.K. Shop Prices Slip
The British consumer remains in a sour mood, and retailers slashed prices in order to entice consumers. The BRC Shop Price Index fell for a sixth straight month, with a reading of -0.5% in November. With political and economic uncertainty weighing heavily in the air, consumers have been hesitant to loosen the purse strings.
British voters will head to the polls on December 12, and traders should be prepared for volatility from the pound as we get closer to Election Day. Daily poll results are closely watched by investors, and any movement in the parties’ poll standings could quickly affect the movement of GBP/USD.
Investors Eye U.S. GDP
It’s a very busy day in the U.S. on Wednesday, as there will be no further releases until next week, due to the Thanksgiving holiday. The key release is Preliminary GDP (second estimate) for the third quarter. Advanced GDP (initial estimate) posted a gain of 1.9%, and the second estimate is projected to confirm this figure. Other market-movers include Chicago PMI, which is expected to show contraction for a third successive month, and Core PCE Price Index. This index, which is the Federal Reserve’s preferred inflation indicator, is projected to improve to 0.2%.
GBP to USD is showing stronger movement, but the pair remains range-bound this week. On the downside, we find support at 1.2800. Below, we have the 50-EMA line at 1.2732, which is immediately followed by support at 1.2720.
On the upside, 1.2910 has some breathing room, following losses by GBP/USD on Wednesday. This is followed by resistance at the symbolic number of 1.300. With the GBP/USD appearing content to remain within a narrow range, it could be an uneventful week for the pair.
Pacific Currencies – Summary
USD/CNY is currently trading at 7.0258, down 0.09%. On the technical front, we have weak resistance at 7.0400, followed by the 50-EMA line at 7.0446. If the pair can break above the 50-EMA, it has some room to move upwards.
AUD/USD is currently trading at 0.6778, down 0.13%. On the construction front, Australian Construction Work posted a fifth straight decline, although the reading of -0.4% in Q3 was markedly better than the 3.8% decline in the second quarter.
NZD/USD is almost unchanged and is currently trading at 0.6429. The pair shrugged off a positive trade balance report – the trade deficit narrowed to NZ$1.01 billion in October, down from NZ$1.24 billion a month earlier.
This article was originally posted on FX Empire
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