After starting the week with slight losses, GBP/USD has paused in the Wednesday session. Currently, GBP/USD is trading at 1.2650, down 0.02% on the day. On the release front, there are no British events. In the U.S., the sole event is the Richmond Manufacturing Index, which is projected to climb to 6 points. On Thursday, the U.S. releases Preliminary GDP and unemployment claims.
Inflation in the U.K. has been moving higher. Consumer inflation pushed above the 2% level in April, with a gain of 2.1%. This marked a 4-month high. The upward trend has continued with shop price inflation, which accelerated to 0.8% in May, up from 0.4% in the previous release.
The U.S. consumer remains very optimistic about the economy, according to the latest CB consumer confidence index. The index jumped to 134.1 in May, up from 129.2 in the April release. This score easily beat the estimate of 130.1 and is close to 18-year highs. Retail sales were soft in April, but the sharp improvement in consumer confidence has raised hopes that retail sales data will improve in May.
•1.2615 is providing support
•1.2723 is the next resistance line
•Current range: 1.2615 to 1.2723
It is getting ugly out there and despite a backdrop of geopolitical risks that could squeeze supplies, the latest trade war threats from China could cripple global growth and thus take down oil prices. West Texas Intermediate crude is down 2.1% off its worse levels, while Brent’s decline is closer to 1.6% as no end appears in sight for the trade war. Crude is falling through key support levels and is quickly erasing the effects of the OPEC + production cuts. WTI’s end of year rally to mid-April has seen price give back roughly 40% of those gains.
Inflation in the U.K. has been moving higher. Consumer inflation pushed above the 2% level in April, with a gain of 2.1%. This marked a 4-month high. The upward trend has continued with shop price inflation, which accelerated to 0.8% in May, up from 0.4% in the previous release.
The U.S. consumer remains very optimistic about the economy, according to the latest CB consumer confidence index. The index jumped to 134.1 in May, up from 129.2 in the April release. This score easily beat the estimate of 130.1 and is close to 18-year highs. Retail sales were soft in April, but the sharp improvement in consumer confidence has raised hopes that retail sales data will improve in May.
•1.2615 is providing support
•1.2723 is the next resistance line
•Current range: 1.2615 to 1.2723
It is getting ugly out there and despite a backdrop of geopolitical risks that could squeeze supplies, the latest trade war threats from China could cripple global growth and thus take down oil prices. West Texas Intermediate crude is down 2.1% off its worse levels, while Brent’s decline is closer to 1.6% as no end appears in sight for the trade war. Crude is falling through key support levels and is quickly erasing the effects of the OPEC + production cuts. WTI’s end of year rally to mid-April has seen price give back roughly 40% of those gains.
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