GBP/USD is trading at 1.2626, up 0.14% on the day. On the release front, there are no major British events. It was a busy day for U.S. fundamentals. The Federal Reserve’s preferred inflation gauge, Core PCE Price Index, improved to 0.2%, matching the forecast. However, personal spending slowed to o.3%, after a strong gain of 0.9% in the previous release. Consumer confidence also softened, dropping from 102 in April to 100 in May.
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The Federal Reserve continues insist that its stance is neutral with regard to interest rate moves. The Fed has said that the next rate move could be in either direction, but the markets are by no means convinced. The well-respected CME Group has priced in a quarter-point rate cut at 36% in June, and 46% in September. These figures are quite high, given the strength of the U.S. economy, which posted impressive growth of 3.1% in the first quarter. If the ongoing trade war with China continues, U.S. growth could soften, likely raising the odds of a rate cut in the next few months.
•1.2615 is fluid. Currently, it is a weak support line
•1.2723 is the next resistance line
•Current range: 1.2615 to 1.2723
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