GBP/USD – British pound subdued in data-light session

GBP/USD is flat in the Thursday session. Currently, GBP/USD is trading at 1.2685, down 0.03% on the day. On the release front, U.S. unemployment claims was unexpectedly high, climbing to 222 thousand. This was the highest reading in five weeks. There are no British events on the schedule. On Friday, the U.S. releases retail sales and consumer confidence reports.

In the U.K., the race is on to replace Prime Minister Theresa May, who will step down in August. Boris Johnson, the former foreign minister, is favored to win the leadership race, but he will have to beat out seven other candidates. Earlier this week, Johnson said that the U.K. should leave the European Union as scheduled on October 31, with or without a deal in place. Johnson is known for his hard-line approach towards the EU, and if he becomes prime minister, relations could fray even further with the EU, which could hurt the British pound.

As expected, consumer inflation in the U.S. remained soft in May. CPI slowed to 0.1%, down from 0.3% in the previous release. This matched the estimate. The core reading posted a gain of 0.1% for a fourth straight month, shy of the forecast of 0.2%. With the May inflation numbers remaining low, there could be more pressure on the Fed to lower interest rates in order to boost economic activity and inflation. The likelihood of further rates this year is increasing – the CME Group has set the odds of a July cut at 66% and another cut in September at 50%. Lower interest rates make the U.S. dollar less attractive to investors, so investors will be keeping an eye on alternative assets.

Aussie drops on stubborn unemployment

WTI crude – Spikes on reported tanker attacks

Stocks stabilize as markets await trade and Hong Kong developments; Oil Surges on tanker attacks in Middle East

GBP/USD Fundamentals

Thursday (June 13)

• 8:30 US Import Prices. Estimate -0.3%
• 8:30 US Unemployment Claims. Estimate 215K. Actual 222K
• 10:30 US Natural Gas Storage. Actual 102B
  
• 13:01 US 30-year Bond Auction
  

Friday (June 14)

• 8:30 US Core Retail Sales. Estimate 0.5%
• 8:30 US Retail Sales. Estimate 0.7%
• 9:30 British CB Leading Index
• 10:00 US Preliminary UoM Consumer Sentiment. Estimate 98.1

*All release times are DST

*Key events are in bold

GBP/USD for Thursday, June 13, 2019

GBP/USD June 13 at 11:30 DST

Open: 1.2689 High: 1.2708 Low: 1.2663 Close: 1.2685

GBP/USD Technical

GBP/USD showed little movement in the Asian session. The pair posted slight losses in the European session but then recovered. GBP/USD is steady in North American trade

• 1.2615 is providing support
• 1.2723 is the next resistance line
• Current range: 1.2615 to 1.2723

Further levels in both directions:

• Below: 1.2615, 1.2477 and 1.2401
• Above: 1.2723, 1.2841, 1.2910 and 1.3000

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